BlackRock World Mining Trust Plc - Portfolio Update

BlackRock World Mining Trust Plc - Portfolio Update

PR Newswire

LONDON, United Kingdom, August 15

BLACKROCK WORLD MINING TRUST PLC (LEI - LNFFPBEUZJBOSR6PW155

All information is at 31 July 2024 and unaudited.

Performance at month end with net income reinvested
	One	Three	One	Three	Five
	Month	Months	Year	Years	Years
Net asset value	-0.8%	-4.0%	-6.7%	6.4%	68.4%
Share price	-1.1%	-2.7%	-4.7%	10.3%	97.3%
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*	-1.0%	-4.5%	1.1%	8.0%	58.7%
* (Total return) Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream

At month end

Net asset value (including income)1:	567.78p
Net asset value (capital only):	560.61p
Share price:	563.00p
Discount to NAV2:	0.8%
Total assets:	£1,217.9m
Net yield3:	6.0%
Net gearing:	11.7%
Ordinary shares in issue:	191,183,036
Ordinary shares held in Treasury:	1,828,806
Ongoing charges4:	0.91%
Ongoing charges5:	0.81%

1 Includes net revenue of 7.17p.

2 Discount to NAV including income.

3 Based on a second interim dividend of 5.50p per share declared on 24 August 2023, a third interim dividend of 5.50p per share declared on 11 October 2023 and a final dividend of 17.00p per share declared on 7 March 2024 in respect of the year ended 31 December 2023, and a first interim dividend of 5.50p per share declared on 10 May 2024 in respect of the year ending 31 December 2024.

4 The Company's ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 31 December 2023.

5 The Company's ongoing charges are calculated as a percentage of average daily gross assets and using the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 31 December 2023.

Country Analysis	Total Assets (%)
Global	62.7
Canada	10.8
Latin America	8.5
United States	6.8
Australasia	5.7
Other Africa	3.7
South Africa	0.7
Indonesia	0.6
Net Current Assets	0.5
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	100.0
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Sector Analysis	Total Assets (%)
Diversified	35.4
Copper	24.4
Gold	22.8
Steel	5.3
Industrial Minerals	3.7
Iron Ore	2.1
Platinum Group Metals	1.7
Aluminium	1.6
Uranium	1.4
Nickel	1.0
Zinc	0.1
Net Current Assets	0.5
	-----
	100.0
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Ten largest investments
Company	Total Assets %
Glencore	7.7
BHP:
Equity	5.8
Royalty	1.6
Rio Tinto	7.2
Vale:
Debenture	2.6
Equity	2.9
Newmont	5.5
Anglo American	5.2
Agnico Eagle Mines	4.9
Freeport-McMoRan	4.6
Teck Resources	3.7
Wheaton Precious Metals	3.6

Asset Analysis	Total Assets (%)
Equity	96.7
Bonds	1.6
Preferred Stock	0.7
Convertible Bond	0.6
Option	-0.1
Net Current Assets	0.5
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	100.0
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Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:

Performance

The Company's NAV declined by 0.8% in July, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which fell by 1.0% (performance figures in GBP).

The mining sector was broadly flat in July and lagged broader equity markets, with the MSCI ACWI TR Index rising by 1.6%. Mined commodity prices were mostly soft, with copper and iron ore (62% fe.) prices falling by 3.7% and 4.2% respectively. Gold bucked the trend, however, rising by 4.1% as declining real interest rate expectations and US dollar weakness were tailwinds.

In macroeconomic news, China held its Third Plenum during the month, a key meeting which takes place roughly every five years that aims to map out long-term economic and social policies. A broad range of reform measures were announced (over 300 in total) but the market appeared disappointed it did not contain more drastic property support measures. Meanwhile, as polls indicated increased popularity for former US president, Donald Trump, concerns grew around potential tariffs, US-China trade tensions and the impact on growth.

Turning to the miners, they reported on Q2 production during the month and some reported on earnings. It was a mixed picture, with some companies experiencing production challenges and cost and capex increases announced. We also saw a pick-up in mergers and acquisitions (M&A) activity with Cleveland-Cliffs announcing the acquisition of Stelco and BHP and Lundin Mining announcing a joint acquisition of Filo Corp.

Strategy and Outlook

Constrained mined commodity supply, an evolving demand picture, strong balance sheets and valuations below historic averages make us optimistic about the outlook for the sector on a long-term view.

Mining companies have focused on capital discipline in recent years, meaning they have opted to pay down debt, reduce costs and return capital to shareholders, rather than investing in production growth. This is limiting new supply coming online and there is unlikely to be a quick fix, given the time lags involved in investing in new mining projects. The cost of new projects has also risen significantly and recent M&A activity in the sector suggests that, like us, strategic buyers see an opportunity in existing assets in the listed market, currently trading well below replacement costs. Other issues restricting supply include cases of governments closing mines, permitting issues and a general lack of shovel-ready projects.

Meanwhile, the demand side of the equation appears to be evolving. The commodity super-cycle (2002 - 2011) was all about China's extraordinary demand growth. Today, China remains the most important individual economy for mining, but we are expecting this importance to gradually decline through to the end of the decade. We expect global infrastructure spending to drive the next wave of demand, with low carbon transition-related infrastructure particularly meaningful. Offshore wind, for example, requires 5.4x more steel and 2.9x more copper per megawatt of power capacity when compared with gas (source: BHP analysis, Hatch, ArcelorMittal, August 2023). The other area gaining attention is the implications for materials from the build out of AI-related data centres, both for the centres themselves but also for the increased power infrastructure required.

16 August 2024

Latest information is available by typing www.blackrock.com/uk/brwm on the internet. Neither the contents of the Manager's website nor the contents of any website accessible from hyperlinks on the Manager's website (or any other website) is incorporated into, or forms part of, this announcement.

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