BlackRock World Mining Trust plc

About this investment trust

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

The Company aims to provide a diversified investment in mining and metal assets worldwide, actively managed with the objective of maximising total returns. While the policy is to invest principally in quoted securities, the Company’s investment policy includes investing in royalties derived from the production of metals and minerals as well as physical metals. Up to 10% of gross assets may be held in physical metals and up to 20% may be invested in unquoted investments.

Why choose it?

BlackRock’s experienced natural resources team looks across the globe to build a diversified portfolio of mining stocks, exposed to a range of compelling long-term themes – decarbonisation, digitalisation or the development of renewable energy sources. This is balanced with investment in more traditional areas such as gold and precious metals, designed to provide long-term capital growth and a diversifying income stream.

Suited to…

Investors looking for a specialist mining Trust to provide long-term diversification of income and capital, geared to the changing dynamics of the global economy. These companies can be volatile, so some tolerance for market uncertainty is important.

AJ Bell Award: As at 3 September 2021.

Past performance is not a reliable indicator of future results and should not be the sole factor of consideration when selecting a product or strategy.

What are the risks?

• Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
• Overseas investment will be affected by movements in currency exchange rates.
• Emerging market investments are usually associated with higher investment risk than developed market investments. Therefore the value of these investments may be unpredictable and subject to greater variation.
• Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.
• Mining shares typically experience above average volatility when compared to other investments. Trends which occur within the general equity market may not be mirrored within mining securities.

Useful information

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Fees & Charges

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ESG Integration

The fund noted above does not commit to sustainable criteria nor does it have a sustainable investment objective.

BlackRock considers many investment risks in our processes. In order to seek the best risk-adjusted returns for our clients, we manage material risks and opportunities that could impact portfolios, including financially material Environmental, Social and/or Governance (ESG) data or information, where available. See our Firm Wide ESG Integration Statement for more information on this approach and fund documentation for how these material risks are considered within this product, where applicable.

Fund manager commentary

31 October 2024

Comments from the Portfolio Managers

Please note that the commentary below includes historic information in respect of performance data in respect of portfolio investments, index performance data and the Company’s NAV performance.

The figures shown relate to past performance. Past performance is not a reliable indicator of current or future results

Performance

The Company’s NAV fell by 1.2% in October, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which declined by 2.3% (performance figures in GBP).

The mining sector had mixed performance in October 2024, as a lack of detail on China’s stimulus measures weighed on commodities. For reference, global equity markets, as measured by the MSCI ACWI TR Index, returned -2.2%.

In the commodities space, iron ore (62% fe), copper and nickel fell by 7.3%, 3.3% and 10.5% respectively. The aluminium price held up better, down by just 0.7%, as supply was disrupted by port issues at Jamalco and as future supply looked set to be increasingly constrained by Alcoa announcing the curtailment of its Kwinana alumina refinery in Western Australia.

In the precious metals space, gold and silver prices rose by 4.1% and 4.8% respectively, appearing to benefit from ‘safe-haven’ demand as a result of ongoing geopolitical tensions in the Middle East and the approaching U.S. presidential election.

Finally, we saw more technology hyperscalers, indicating a preference for nuclear to power their artificial intelligence (AI) datacentres, which lifted sentiment on uranium and uranium miners.

Strategy and Outlook

Near term, we expect performance to be driven by the China stimulus situation, which is evolving, and we are watching closely to see if it translates into a pickup in demand. Longer term, we expect mined commodity demand growth to be driven by increased global infrastructure build out, particularly related to the low carbon transition and increased power demand.

Meanwhile, the supply side of the equation is constrained. 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. Turning to the companies, balance sheets in the sector are very strong relative to history. Despite this, valuations are low relative to historic averages and relative to broader equity markets.

All data points are in USD terms unless stated otherwise.

Unless otherwise stated all data is sourced from BlackRock as at 31 October 2024.

Any opinions, forecasts represent an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results.

This information should not be relied upon by the reader as research, investment advice or a recommendation.

Risk: Reference to the names of each company mentioned in this communication is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies.

Portfolio manager biographies

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Evy Hambro is co-manager of the BlackRock World Mining Trust plc, and is Global Head of Thematic and Sector Investing, as well as the Head of the Natural Resources Equity Team. He sits on the BlackRock Global Operating Committee and is a member of the Alpha Strategies Partner Group. He is also manager of a number of the team's portfolios covering the mining, gold and circular economy strategies. His service with the firm dates back to 1994, including his years with Mercury Asset Management and Merrill Lynch Investment Managers which merged with BlackRock in 2006. Evy has a degree in agricultural food marketing.

Olivia Markham is co-manager of the BlackRock World Mining Trust plc. As a member of the Natural Resources team, Olivia is responsible for coverage of the gold, mining and circular economy strategies and is involved in the management of a number of the team's portfolios. She joined BlackRock in 2011. Previously, she was head of the European Mining team at UBS with lead coverage of the UK diversified miners. She also spent four years working within the mergers and acquisitions team at BHP Billiton. Olivia has a degree in finance.

Board of directors

All the Directors are non-executive. The Board as a whole constitutes the Audit & Management Engagement Committee.

Charles (Chip) Goodyear (appointed 24 August 2023) (Chairman since 9 May 2024 ) brings a wealth of relevant industry knowledge and experience having retired in October 2007 as the chief executive officer of BHP, the world’s largest diversified resources company. He is also a former executive vice president and chief financial officer of Freeport-McMoRan and began his career at Kidder, Peabody & Co. where he participated in merger and acquisition and financing activities for natural resources companies. He is currently president of Goodyear Capital Corporation and Goodyear Investment Company and a trustee of the National World War II Museum.

Srinivasan Venkatakrishnan (appointed 1 August 2021) (Chairman of the Audit Committee) is a Corporate Director and an experienced mining executive who brings a wealth of mining and financial experience, gained through his vast experience of leading global mining businesses, in a career that has spanned across 17 countries and six continents. He has a proven track record of leading multinational organisations - including major publicly listed companies - through periods of challenging and transformative change. He is currently the chair of Endeavour Mining Plc and a non-executive director of Wheaton Precious Metals Corporation. His past directorships include The Weir Group PLC.

During his executive career, he served as CEO of Vedanta Resources plc from 2018 to 2020 and was CEO of AngloGold Ashanti Limited between 2013 to 2018, having previously been Chief Financial Officer of the business from 2005 and of Ashanti Goldfields Limited from 2000. In his early career, he was a director with Deloitte in London, leading corporate restructurings on behalf of both corporates and financiers. He is a past board member of the World Gold Council, International Council on Mining and Metals, Business Leadership South Africa, the Chamber of Mines of South Africa and a past member of the Financial Review Investigation Panel of the Johannesburg Stock Exchange.

Judith Mosely (appointed 19 August 2014) (Senior Independent Director) is a non-executive director of Galiano Gold Inc. and Eldorado Gold Corp. and is chair of sustainability and member of the audit committee of both companies. She is also a board member of Women in Mining (UK) and a member of the investment advisory committee of Resource Capital Fund credit. She had over 20 years of experience in the mining and metals sector and most recently held the position of Business Development Director for Rand Merchant Bank in London with responsibility for developing the bank’s African business with international mining and metals companies. She previously headed the mining finance team at Société Générale in London.

Jane Lewis (appointed 28 April 2016) (Chair of the Management Engagement Committee) is an investment trust specialist who, until August 2013, was a director of corporate finance and broking at Winterflood Investment Trusts. Prior to this she worked at Henderson Global Investors and Gartmore Investment Management Limited in investment trust business development and at West LB Panmure as an investment trust broker. She is chairman of CT UK Capital and Income Investment Trust PLC and a non-executive director of JPMorgan Global Growth & Income plc and Majedie Investments PLC.

Elisabeth Scott (appointed 9 May 2024) has over 35 years' experience in the asset management industry. She began her career as an investment manager with the British Investment Trust and worked in the Hong Kong asset management industry from 1992 until 2008, latterly as managing director and country head of Schroder Investment Management (Hong Kong) Ltd. She also chaired the Hong Kong Investment Funds Association between 2005 and 2007. She has been a non-executive director of investment companies since 2011. She is currently the chair of JPMorgan Global Emerging Markets Income Trust plc and India Capital Growth Fund Ltd and a non-executive director of Capital Group UK Management Company and Allianz Technology Trust PLC. She chaired the Association of Investment Companies from January 2021 until January 2024.