Tag: BRWM

After a strong year for the mining sector in 2022, supply and demand dynamics are likely to remain favourable in the year ahead, with gold acting as a ballast for the portfolio, says Olivia Markham, manager of the BlackRock World Mining Trust plc (LON:BRWM).

Mining was a rare bright spot in an otherwise gloomy year in financial markets. The energy transition has brought demand for mined commodities, at a time when low capital investment has left supply constrained. These patterns are likely to continue into 2023, with the energy transition picking up speed and companies maintaining spending discipline.  

In the year ahead, we see little shift in the supply and demand dynamics that governed commodity markets in 2022. Increased global infrastructure spending¹ is supporting demand, with significant commitments from the US, Europe² and China,³ particularly on green energy infrastructure. The war in Ukraine has demonstrated the need for energy independence, which is galvanising global governments to take action.

The mining sector will continue to play a critical role in supplying materials for the energy transition. Lower-carbon technologies such as wind turbines, solar panels and electric vehicles are dependent on mined materials – including lithium for batteries, or copper for electric cars. These commodities are becoming increasingly precious as countries compete for scarce resources.

Yet, we still see management teams being careful on their capital spending commitments. The ‘commodity supercycle’ ran approximately from 2002 to 2011 and saw mining companies spending in excess on production growth towards the end of the period. The excesses of the previous commodities cycle are still fresh in the mind for many companies and they continue to increase supply only very gradually. In the longer-term, it may be that capital spending increases, but this is likely to take years to feed through into new supply. In the meantime, supply will remain constrained, supporting prices.

Mining companies are generally in robust financial health. This will be very important in the year ahead, when rising interest rates will test those companies with high debt levels. They are also generating significant cash, which – we believe – is likely to come through to shareholders as dividends. At a time when inflationary pressures are still rife, these high and growing cash flows are likely to be highly prized by investors. In our view, mining equities are an effective way to hedge portfolios against persistent inflationary pressures.

Gold

The BlackRock World Mining Trust currently has around 12.7% invested in gold.⁴ This is low relative to the trust’s history and a reflection of the strength of the outlook for mining. Nevertheless, we still see a strong argument for holding gold and gold equities for diversification benefits. Gold proved an important ballast for portfolio in 2022.

Diversification: Diversification and asset allocation may not fully protect you from market risk.

The Russia Ukraine crisis, higher energy costs, and rising interest rates put much greater uncertainty around global economic growth. Recession is forecast for most major economies in the year ahead. This is usually a compelling backdrop for gold, which has appeal for investors as a safe haven.

Persistent inflation is a risk. While inflationary pressures are easing, there is a long way to go until they dissipate completely and most central banks expect inflation to be structurally higher from here. Meanwhile, we could see interest rate expectations start to decline should global economic growth deteriorate severely. A real interest rate is a nominal interest rate minus the rate of inflation. This suggests to us that real interest rates are more likely to move lower rather than higher, which should be supportive for gold.

Against this backdrop, we are focusing the portfolio on those companies that are likely to be least vulnerable to any inflationary pressures – where costs are under control, for example, or that have significant pricing power. Encouragingly, we have seen a marked change in behaviour in the sector with companies returning this capital to shareholders in the form of dividend increases and share buybacks.

Across our holdings in gold equities and other mining companies, we continue to manage the portfolio with a quality bias. That means companies with stronger-than-average balance sheets and lower than average costs. We gravitate towards those companies we believe have the strongest management teams and those we think are managing ESG risks effectively. We believe this will be particularly important in the year ahead, where economic pressures and uncertainty are likely to remain.  

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

1 https://www.ice.org.uk/news-insight/news-and-blogs/ice-blogs/the-infrastructure-blog/key-themes-for-global-infrastructure-policy-2022/#:~:text=Infrastructure%20investment%20is%20still%20seen%20as%20key%20to%20growth%20and%20sustainable%20development ICE – 20 December 2022

2 https://www.bbc.co.uk/news/science-environment-62464546 BBC – 8 August 2022

3 https://www.unpri.org/pri-blog/the-net-zero-transition-in-china-progress-has-been-made-but-challenges-remain/10132.article#:~:text=China’s%20net%2Dzero%20transition%20pathway,of%20the%20country’s%20transition%20pathway UNPRI – 20 June 2022

4 https://www.blackrock.com/uk/solutions/investment-trusts/our-range/blackrock-world-mining-investment-trust/performance-holdings#holdings-breakdown:~:text=Sector%20allocation%20(as%20at%2031/12/2022 BlackRock – 31 December 2022

Risk warnings

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.

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

Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.

BlackRock World Mining Trust specific risks

BlackRock World Mining Trust plc

Counterparty Risk, Currency Risk, Emerging Markets, Gearing Risk, Gold / Mining Funds

Description of Fund Risks

Counterparty Risk

The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.

Currency Risk

The Fund invests in other currencies. Changes in exchange rates will therefore affect the value of the investment.

Emerging Markets

Emerging markets are generally more sensitive to economic and political conditions than developed markets. Other factors include greater ‘Liquidity Risk’, restrictions on investment or transfer of assets and failed/delayed delivery of securities or payments to the Fund.

Gearing Risk

Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.

Gold / Mining Funds

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.

Important Information

In the UK and Non-European Economic Area (EEA) countries: this is issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

This document is marketing material. The Company is managed by BlackRock Fund Managers Limited (BFM) as the AIFM. BFM has delegated certain investment management and other ancillary services to BlackRock Investment Management (UK) Limited. The Company’s shares are traded on the London Stock Exchange and dealing may only be through a member of the Exchange. The Company will not invest more than 15% of its gross assets in other listed investment trusts. SEDOL™ is a trademark of the London Stock Exchange plc and is used under licence.

Net Asset Value (NAV) performance is not the same as share price performance, and shareholders may realise returns that are lower or higher than NAV performance.

The investment trusts [listed below/above/in this document] currently conduct their affairs so that their securities can be recommended by IFAs to ordinary retail investors in accordance with the Financial Conduct Authority’s rules in relation to nonmainstream investment products and intend to continue to do so for the foreseeable future. The securities are excluded from the Financial Conduct Authority’s restrictions which apply to non-mainstream investment products because they are securities issued by investment trusts. Investors should understand all characteristics of the funds objective before investing. For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in local language in registered jurisdictions.

Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.

This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.

© 2023 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS and iSHARES are trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

MKTGH0123E/S-2688273

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.

All information is at 31 December 2022 and unaudited.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

Performance at month end with net income reinvested

	One Month	Three Months	One Year	Three Years	Five Years
Net asset value	-1.7%	15.1%	17.5%	86.9%	94.4%
Share price	0.6%	23.5%	26.0%	117.1%	131.4%
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*	-1.5%	14.5%	11.5%	54.9%	57.6%

* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream

At month end

Net asset value (including income)1:	687.86p
Net asset value (capital only):	663.91p
1 Includes net revenue of 23.95p
Share price:	697.00p
Premium to NAV2:	1.3%
Total assets:	£1,457.1m
Net yield3:	6.2%
Net gearing:	10.2%
Ordinary shares in issue:	188,753,036
Ordinary shares held in Treasury:	4,258,806
Ongoing charges4:	0.9%
Ongoing charges5:	0.8%

² Premium to NAV including income.
³ Based on a final dividend of 27.00p per share declared on 8 March 2022 in respect of the year ended 31 December 2021, and a first, second and third interim dividend of 5.50p per share declared on 6 May 2022, 23 August 2022 and 16 November 2022 respectively, in respect of the year ending 31 December 2022.
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 2021.
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 2021.

Ten largest investments

Company	Total Assets %
BHP	9.3
Vale:
Equity	6.4
Debenture	2.6
Glencore	7.5
Anglo American	5.1
Rio Tinto	4.4
First Quantum Minerals:
Equity	2.3
Bond	1.7
ArcelorMittal	3.9
Freeport-McMoRan	3.9
Teck Resources	3.5
Franco-Nevada	2.6

Asset Analysis	Total Assets (%)
Equity	91.5
Bonds	3.8
Preferred Stock	3.0
Options	-0.1
Net Current Assets	1.8
	—–
	100.0
	=====

Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:

Performance

The Company’s NAV fell by 1.7% in December, underperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned -1.5% (performance figures in GBP).

The mining sector outperformed broader equity markets during the month, with the MSCI ACWI TR Index falling by 3.8%. The main news was the Chinese administration confirming the removal of most Covid-related restrictions. The reaction from mining equities was muted, however, having moved higher in October and November on expectations that China was about to re-open. Meanwhile, economic data from China remained weak, with its manufacturing PMI reading for December falling to 47.0, albeit this is now expected to improve.

Mined commodity prices generally performed well, aided by a weakening US dollar. For reference, iron ore (62% fe.) and copper prices were up by 15.7% and 1.7% respectively over the month. Meanwhile, warmer-than-expected weather during the month led to falling gas prices which reduced cost pressures for the miners.

Strategy and Outlook

We do not expect the mining sector to be immune to deteriorating global economic growth. However, whilst recession looms for developed markets, the most important economy for mining, China, is moving in the opposite direction, re-opening following a year of lockdowns and a strict zero-Covid policy.

Meanwhile, mined commodity markets are generally tight, with inventories for many commodities at historic lows. At the same time, mined supply is being constrained by the underinvestment of recent years and continued capital discipline. Mining companies are in an excellent financial position, in our view, with high levels of free cash flow, rock-solid balance sheets and a continued focus on returning capital to shareholders.

Last year, we saw greater appreciation of the role mining companies will need to play in supplying the materials required for lower carbon technologies like wind turbines, solar panels and electric vehicles. In 2023, we expect Brown to Green to emerge as a key theme, where mining companies focus on reducing the greenhouse gas emissions intensity associated with their production. We expect to see a re-rating for the mining companies able to best navigate this and are playing this in the portfolio.

All data points are in USD terms unless stated otherwise.

BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.

All information is at 31 October 2022 and unaudited.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

Performance at month end with net income reinvested

	One	Three	One	Three	Five
	Month	Months	Year	Years	Years
Net asset value	0.7%	4.2%	10.3%	77.5%	84.5%
Share price	7.0%	2.8%	15.2%	114.5%	110.2%
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*	-0.3%	1.0%	1.4%	44.8%	47.8%

* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream

At month end

Net asset value (including income)1:	606.74p
Net asset value (capital only):	578.90p
1 Includes net revenue of 27.84p
Share price:	609.00p
Premium to NAV2:	0.4%
Total assets:	£1,331.1m
Net yield3:	7.1%
Net gearing:	9.8%
Ordinary shares in issue:	188,753,036
Ordinary shares held in Treasury:	4,258,806
Ongoing charges4:	0.9%
Ongoing charges5:	0.8%

² Discount to NAV including income.
³ Based on a third interim dividend of 5.50p per share declared on 18 November 2021, and a final dividend of 27.00p per share declared on 8 March 2022 in respect of the year ended 31 December 2021, and a first and second interim dividend of 5.50p per share declared on 6 May 2022 and 23 August 2022 respectively, in respect of year ending 31 December 2022.
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 2021.
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 2021.

Ten largest investments

Company	Total Assets %
Glencore	8.4
BHP	8.2
Vale:
Equity	5.6
Debenture	2.5
Anglo American	5.5
First Quantum Minerals:
Equity	2.3
Bond	1.9
Rio Tinto	3.7
Freeport-McMoRan	3.7
Teck Resources	3.3
ArcelorMittal	3.0
OZ Minerals:
Royalty	1.6
Equity	1.1

Asset Analysis	Total Assets (%)
Equity	87.3
Bonds	4.2
Preferred Stock	3.0
Net Current Assets	5.5
	—–
	100.0
	=====

Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:

Performance

The Company’s NAV rose by 0.7% in October, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned -0.3% (performance figures in GBP).

The Company posted positive returns during the month, albeit underperforming broader equity markets, with the MSCI ACWI TR Index rising by 2.8% (in GBP terms). This came despite deteriorating global economic growth data with, for example, manufacturing PMI statistics for Europe and the US showing steep declines.

In mining-related news, eyes focused on the world’s largest mined commodity consumer, China, which held its 5-yearly Communist Party Congress during the month. The Congress appeared to strengthen President Xi Jinping’s leadership position, but markets were disappointed by the lack of a meaningful update on China’s zero-Covid policy. This reduced optimism around a potential recovery in China’s property market which has struggled in recent months.

The mining sector reported Q3 production results during the month. We saw a continuation of the theme of production challenges, most notably in the copper industry. Mined commodity prices were generally weak and this combined with cost inflation has squeezed margins across the sector. Iron ore prices fell particularly hard, with the 62% fe. price down 16.5% to $82/tonne. This spot price still allows for healthy margins for the lower-cost producers but is now down to a level at which we should see some cost curve support.

Strategy and Outlook

Supply and demand in mined commodity markets is generally very tight today and prices look well-supported in our view. On the demand side, increased global infrastructure spending is supporting demand, whilst we expect the mining sector to play a critical role in the coming years in supplying materials required for lower-carbon technologies, like wind turbines, solar panels and electric vehicles. The Russia/Ukraine crisis puts greater focus on energy independence, particularly for Europe, and will further accelerate investment into renewable energy capacity build out in our view. On the supply side, we are encouraged by what we are hearing from management teams in terms of maintaining their focus on capital discipline. Longer term, ill-discipline remains a risk but, regardless, increases in capital expenditure would take some time to feed through into new supply given the time-lags associated with mining projects.

Mining companies are generally in robust financial shape today with strong balance sheets and high levels of free cash flow being generated. Finally, we view mining equities as an effective way to hedge portfolios against persistent inflationary pressures.

All data points are in USD terms unless stated otherwise.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

BlackRock World Mining Trust plc (LON:BRWM) has announced that the third quarterly interim dividend in respect of the quarter ended 30 September 2022 of 5.50p per ordinary share has been declared by the Directors, payable on 22 December 2022 to holders of ordinary shares on the register at the close of business on 25 November 2022 (ex-dividend date is 24 November 2022).

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

It has been a tougher time for certain commodities in recent months as fears over the global economy mount. The longer-term outlook for the mining sector is still buoyant, argues Evy Hambro, co-manager of the BlackRock World Mining 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.

After gains since the start of the year, certain commodities have started to weaken over the summer. In particular, those commodities seen as dependent on global economic growth have seen prices fall. This includes metals such as iron ore, steel and copper.¹ However, we believe the structural arguments for mining companies are still intact.

The short-term sell-off has been prompted by fears of global recession. These fears are well-founded, with rising interest rates and inflation weighing on economic growth. The immediate sell- off was sparked by weakness in China; in particular, the Chinese property sector, and ongoing, economically damaging restrictions as the government sticks to its zero-Covid policy.

Equally, earnings in the mining sector have been hurt by rising input costs, including higher oil prices, rising wages rates, higher raw material input costs and supply chain issues. These have dented share prices in the short term and could continue to impact results in the second half of the year.

Longer-term strength

However, we believe any price weakness for commodities is likely to be temporary. China is showing signs of recovery. Recent manufacturing data has shown the sector starting to grow once again.²It has loosened monetary policy and announced support for the property sector and on infrastructure spending.

While there are unquestionably strains elsewhere in the global economy, many commodities are subject to structural forces that are likely to support demand even if the economy weakens. The Ukraine crisis has put a greater focus on energy independence, for example, accelerating the plans of governments across the globe to increase energy supply from alternative sources. We expect the mining sector to play a critical role in the coming years in supplying materials required for lower-carbon technologies, including wind turbines, solar panels and electric vehicles.

Broader global infrastructure needs are also supporting demand for commodities. Infrastructure development is becoming a priority across the globe to promote more efficient use of resources. The US Inflation Reduction Act, passed in August, announced significant spending on green energy infrastructure, including charging infrastructure for electric cars, plus improvements in rail services and other transportation networks.3This shows how infrastructure is being prioritised by governments.

Supply constraints

Demand comes at a time when supply remains limited. The management teams of mining companies continue to maintain a focus on capital discipline, having learnt their lesson on expanding supply too quickly in previous commodities cycles.⁴Equally, for a number of commodities, notably copper, we see mines ageing, creating less supply each year, so mining companies need to run simply to stay still.

It is plausible that more supply comes through over the longer term, particularly given the visibility on demand. However, it will take time for any new expenditure to feed through into new supply, given the complexity of bringing new mining projects on stream. In the meantime, weak supply and strong demand is likely to keep prices elevated for many commodities and support the mining sector.

Mining companies

Mining companies are generally in robust financial shape today, with high levels of free cash flow. This is helping them weather cost pressures. Balance sheets for nearly all mining companies remain strong. This gives them flexibility at a difficult moment.⁵

Of course, there are risks. Mining companies often operate in difficult parts of the globe and geopolitical tensions are rising, not just with the war in Ukraine, but between China and the US. We strive not to invest in countries where there is uncertainty over the mining code and high political risk. Good governance is vital and we only invest in companies where we have faith in the management team.  

There are two other reasons to consider mining in the current environment. We believe mining equities are an effective way to hedge portfolios against persistent inflationary pressures. There are relatively few sectors that can thrive in the current market environment, but mining has been an area of strength.

Also – and in spite of the relative strength of mining shares since the start of the year – shares remain, in our view, good value relative to other sectors and to their own history. This should hopefully support buybacks and future dividend payments.

While short-term concerns have held back mining shares over the past few months, the factors driving the sector are durable and will start to become increasingly important for the remainder of 2022 and beyond. The world is in transition and this is likely to support the mining sector even in the face of weaker growth.

1 FT – Industrial metal prices melt as global recession fears flare up – 6 Sept 2022

2 Statista – 30 Sept 2022

3 https://www.eesi.org/articles/view/how-the-inflation-reduction-act-and-bipartisan-infrastructure-law-work-together-to-advance-climate-action

4 World Trade Organisation

5 Blackrock – August 2022

Risk warnings

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

Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.

Trust specific risks

Exchange rate risk: The return of your investment may increase or decrease as a result of currency fluctuations.

Emerging markets risk: 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.

Gold/Mining funds risk: 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.

Gearing risk: Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.

Important information

Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

This document is marketing material. The Company is managed by BlackRock Fund Managers Limited (BFM) as the AIFM. BFM has delegated certain investment management and other ancillary services to BlackRock Investment Management (UK) Limited. The Company’s shares are traded on the London Stock Exchange and dealing may only be through a member of the Exchange. The Company will not invest more than 15% of its gross assets in other listed investment trusts. SEDOL™ is a trademark of the London Stock Exchange plc and is used under licence.

Net Asset Value (NAV) performance is not the same as share price performance, and shareholders may realise returns that are lower or higher than NAV performance.

The investment trusts [listed below/above/in this document] currently conduct their affairs so that their securities can be recommended by IFAs to ordinary retail investors in accordance with the Financial Conduct Authority’s rules in relation to non-mainstream investment products and intend to continue to do so for the foreseeable future. The securities are excluded from the Financial Conduct Authority’s restrictions which apply to non-mainstream investment products because they are securities issued by investment trusts. Investors should understand all characteristics of the funds objective before investing. For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in in local language in registered jurisdictions.

BlackRock has not considered the suitability of this investment against your individual needs and risk tolerance. To ensure you understand whether our product is suitable, please read the fund specific risks in the Key Investor Document (KID) which gives more information about the risk profile of the investment. The KID and other documentation are available on the relevant product pages at www.blackrock.co.uk/its. We recommend you seek independent professional advice prior to investing.

This material is marketing material. Any research in this material has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.

This material is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.

© 2022 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS and iSHARES are trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

ID: MKTGH1022E/S-2458433

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.

All information is at 31 August 2022 and unaudited.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm
 

Performance at month end with net income reinvested
	One	Three	One	Three	Five
	Month	Months	Year	Years	Years
Net asset value	3.9%	-13.6%	5.9%	70.4%	75.6%
Share price	4.7%	-13.3%	16.9%	110.4%	110.8%
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*	2.8%	-13.2%	-3.6%	44.2%	42.6%

* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream

At month end

Net asset value (including income)1:	610.68p
Net asset value (capital only):	587.89p
1 Includes net revenue of 22.79p
Share price:	626.00p
Discount to NAV2:	2.5%
Total assets:	£1,336.8m
Net yield3:	6.9%
Net gearing:	14.7%
Ordinary shares in issue:	188,753,036
Ordinary shares held in Treasury:	4,258,806
Ongoing charges4:	0.9%

² Discount to NAV including income.
³ Based on a third interim dividend of 5.50p per share declared on 18 November 2021 and a final dividend of 27.00p per share declared on 8 March 2022 in respect of the year ended 31 December 2021, and a first and second interim dividend of 5.50p per share declared on 6 May 2022 and 23 August 2022 respectively, in respect of year ending 31 December 2022.
⁴ Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2021.

Country Analysis	Total	Sector Analysis	Total
Asset (%)	Assets (%)
Global	69.9	Diversified	41.7
Latin America	8.7	Copper	20.8
Australasia	6.9	Gold	12.1
United States	5.7	Industrial Minerals	7.4
Canada	3.4	Steel	6.9
Other Africa	2.2	Aluminium	3.1
South Africa	1	Iron Ore	2.9
Indonesia	0.9	Platinum Group Metals	2.3
United Kingdom	0.2	Nickel	0.8
Net Current Assets	1.1	Mining Services	0.7
	—–	Zinc	0.2
	100	Net Current Assets	1.1
	=====		—–
		100
		=====

Ten largest investments
Company	Total Assets %
BHP	11.2
Vale:
Equity	5.2
Debenture	2.9
Glencore	7.9
Anglo American	6.5
First Quantum Minerals:
Equity	2.3
Bond	1.0
Rio Tinto	3.9
Freeport-McMoRan	3.9
Teck Resources	3.6
ArcelorMittal	3.1
Franco-Nevada	2.6

Asset Analysis	Total Assets (%)
Equity	91.6
Bonds	4.2
Preferred Stock	3.1
Net Current Assets	1.1
	—–
	100.0
	=====

Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:

Performance

The Company’s NAV rose by 3.9% in August, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +2.8% (performance figures in GBP).

Global equity markets were weak in August, with the MSCI ACWI TR Index falling by 3.7%. Hawkishness from the US Federal Reserve (the Fed) weighed on global equity markets and dampened economic growth expectations, as the Fed indicated that tackling inflation remained its primary concern. The US dollar continued to strengthen, with the DXY Index rising from 105.9 to 108.7, reaching the highest level since 2002. Meanwhile, Chinese economic data was relatively weak, as the country persisted with its zero-covid policy and kept large parts of the country in lockdowns.

Mined commodity performance was negative during the month, with iron ore (62% fe), copper and gold prices down by -16.2%, -1.1% and -2.5% respectively. Turning to the miners, we saw some production issues through the reporting season but cost inflation generally was not as bad as feared and companies remain focused on dividends and buybacks. Supply-side issues were particularly notable in the copper market, where we have seen over 600k tonnes of production downgrades this year.

Strategy and Outlook

Supply and demand in mined commodity markets is generally very tight today and prices look well-supported in our view. On the demand side, increased global infrastructure spending is supporting demand, whilst we expect the mining sector to play a critical role in the coming years in supplying materials required for lower-carbon technologies, like wind turbines, solar panels and electric vehicles. The Russia/Ukraine crisis puts greater focus on energy independence, particularly for Europe, and will further accelerate investment into renewable energy capacity build out in our view. On the supply side, we are encouraged by what we are hearing from management teams in terms of maintaining their focus on capital discipline. Longer-term, ill-discipline remains a risk but, regardless, increases in capital expenditure would take some time to feed through into new supply given the time-lags associated with mining projects.

Mining companies are generally in robust financial shape today, with strong balance sheets and high levels of free cash flow being generated. Finally, we view mining equities as an effective way to hedge portfolios against persistent inflationary pressures.

All data points are in USD terms unless stated otherwise.

15 September 2022

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.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.

All information is at 31 July 2022 and unaudited.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

Performance at month end with net income reinvested

	One Month	Three Months	One Year	Three Years	Five Years
Net asset value	0.5%	-17.4%	-2.1%	54.9%	83.1%
Share price	4.4%	-16.7%	3.7%	85.6%	114.2%
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*	0.4%	-17.0%	-8.8%	34.1%	49.7%

* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream

At month end

Net asset value (including income)1:	587.79p
Net asset value (capital only):	572.76p
1 Includes net revenue of 15.03p
Share price:	598.00p
Premium to NAV2:	1.7%
Total assets:	£1,285.4m
Net yield3:	7.3%
Net gearing:	11.0%
Ordinary shares in issue:	188,578,036
Ordinary shares held in Treasury:	4,433,806
Ongoing charges4:	0.9%

2 Premium to NAV including income.
3 Based on a second and third interim dividend of 5.50p per share declared on 19 August 2021 and 18 November 2021 respectively, and a final dividend of 27.00p per share declared on 8 March 2022 all in respect of the year ended 31 December 2021, and a first interim dividend of 5.50p per share declared on 6 May 2022 in respect of the year ending 31 December 2022.
4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2021.

Country Analysis	Total Assets (%)	Sector Analysis	Total Assets (%)
Global	66.7	Diversified	37.4
Latin America	8.5	Copper	20.5
Australasia	6.9	Gold	13.3
United States	5.6	Steel	7.1
Canada	3.4	Industrial Minerals	7
Other Africa	2.3	Aluminium	2.9
South Africa	1	Iron Ore	2.9
Indonesia	1	Platinum Group Metals	2.5
United Kingdom	0.1	Nickel	1
Net Current Assets	4.5	Mining Services	0.7
	—–	Zinc	0.2
	100	Net Current Assets	4.5
	=====		—–
			100
			=====

Ten largest investments

Company	Total Assets %
Glencore	8.3
BHP	7.9
Vale:
Equity	4.9
Debenture	2.8
Anglo American	6.0
Freeport-McMoRan	4.3
First Quantum Minerals:
Equity	2.3
Bond	1.0
Rio Tinto	3.9
ArcelorMittal	3.2
Teck Resources	3.2
Franco-Nevada	2.8

Asset Analysis	Total Assets (%)
Equity	88.2
Bonds	4.1
Preferred Stock	3.2
Net Current Assets	4.5
	—–
	100.0
	=====

Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:

Performance

The Company’s NAV rose by 0.5% in July, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +0.4% (performance figures in GBP).
Global equity markets performed positively in July, with the MSCI ACWI TR Index rising by 7.0%. Markets appeared to be supported by Q2 earnings generally being better than feared, as well as cooling inflation expectations and bond yields.

July was more mixed for the mining sector, however, with a difficult start to the month but a more positive tone towards the end. China’s manufacturing PMI moved back above 50, indicating a return to expansion. The Chinese government also announced further policy support linked to the property sector and infrastructure spending. Mined commodity performance was negative on the whole, with iron ore (62% fe.), copper and gold prices down by 4.1%, 3.9% and 2.4% respectively.

The miners reported Q2 results during the month, from which cost inflation driven by high energy costs and labour shortages was the most prominent theme. We also saw a number of production misses across the sector, with copper supply notably undershooting expectations.

Strategy and Outlook

Supply and demand in mined commodity markets is generally very tight today and prices look well-supported in our view. On the demand side, increased global infrastructure spending is supporting demand, whilst we expect the mining sector to play a critical role in the coming years in supplying materials required for lower-carbon technologies, like wind turbines, solar panels and electric vehicles. The Russia/Ukraine crisis puts greater focus on energy independence, particularly for Europe, and will further accelerate investment into renewable energy capacity build out in our view. On the supply side, we are encouraged by what we are hearing from management teams in terms of maintaining their focus on capital discipline. Longer-term, ill-discipline remains a risk but, regardless, increases in capital expenditure would take some time to feed through into new supply given the time-lags associated with mining projects.

Mining companies are generally in robust financial shape today with strong balance sheets and high levels of free cash flow being generated. Finally, we view mining equities as an effective way to hedge portfolios against persistent inflationary pressures.

All data points are in USD terms unless stated otherwise.

17 August 2022

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.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

BlackRock World Mining Trust plc (LON:BRWM) has announced that the first quarterly interim dividend in respect of the quarter ended 31 March 2022 of 5.50p per ordinary share has been declared by the Directors, payable on 30 June 2022 to holders of ordinary shares on the register at the close of business on 27 May 2022 (ex-dividend date is 26 May 2022).

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.

All information is at 31 March 2022 and unaudited.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

Performance at month end with net income reinvested

	One Month	Three Months	One Year	Three Years	Five Years
Net asset value	10.4%	28.1%	44.5%	115.4%	142.7%
Share price	6.3%	31.4%	38.4%	144.5%	184.1%
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*	8.6%	22.0%	31.7%	77.6%	94.6%

(Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream

At month end

Net asset value (including income)1:	769.58p
Net asset value (capital only):	754.99p
1 Includes net revenue of 14.59p
Share price:	745.00p
Discount to NAV2:	3.2%
Total assets:	£1,587.3m
Net yield3:	5.7%
Net gearing:	12.1%
Ordinary shares in issue:	184,806,116
Ordinary shares held in Treasury:	8,205,726
Ongoing charges4:	0.9%

2 Discount to NAV including income.

3 Based on a first interim dividend of 4.50p per share declared on 29 April 2021, a second and third interim dividend of 5.50p per share declared on 19 August 2021 and 18 November 2021 respectively, and a final dividend of 27.00p per share declared on 8 March 2022, all in respect of the year ended 31 December 2021.

4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2021.

Country Analysis	Total Assets (%)
Global	73.1
Latin America	7.1
Australasia	6.4
United States	4.9
Canada	3.6
Other Africa	2.8
South Africa	1.3
Indonesia	1.1
United Kingdom	0.2
Net Current Liabilities	-0.5
	—–
	100
	=====

Sector Analysis	Total Assets (%)
Diversified	42.3
Copper	20.9
Gold	15
Steel	7.2
Industrial Minerals	4.6
Aluminium	3.7
Iron Ore	3
Platinum Group Metals	2.5
Nickel	1.1
Zinc	0.2
Net Current Liabilities	-0.5
	—–
	100
	=====

Company	Total Assets (%)
Vale:
Equity	6.1
Debenture	3.3
Glencore	8.7
BHP	8.3
Anglo American	7.3
Freeport-McMoRan	5.1
Teck Resources	4.1
Rio Tinto	4.1
First Quantum Minerals:
Equity	3.3
Bond	0.7
Newmont Mining	3.6
ArcelorMittal	3.1

Asset Analysis	Total Assets (%)
Equity	94.5
Preferred Stock	3.1
Bonds	2.8
Warrants	0.1
Net Current Liabilities	-0.5
	—–
	100
	=====

Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:

Performance

The Company’s NAV returned +10.4% in March, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +8.6% (performance figures in GBP).

The Russia-Ukraine crisis dominated the headlines in March and led to increased concerns around inflation and global economic growth. Mined commodity prices rose almost across the board on supply uncertainty. This was most apparent in the commodities for which Russia has historically been a significant exporter, such as nickel and palladium, with the nickel price for example rising by 30.1% during the month.

Continued increases in global energy costs also put upward pressure on some of the more energy-intensive mined commodities, such as steel, aluminium and zinc. Within the precious metals space, the gold price rose by 2.0% over the month as the metal saw ‘safe-haven’ demand, with notable investor inflows into physically backed gold ETFs.

Elsewhere, economic data from China remained relatively weak as the country grappled with rising COVID-19 cases, with lockdowns in place in a number of key regions. If this weakness persists into the second half of 2022, we would expect the Chinese government to step in with positive stimulus to support the economy.

Strategy and Outlook

Supply and demand in mined commodity markets is generally very tight today and prices look well-supported in our view. On the demand side, increased global infrastructure spending is supporting demand, whilst we expect the mining sector to play a critical role in the coming years in supplying materials required for lower-carbon technologies, like wind turbines, solar panels and electric vehicles. The Russia-Ukraine crisis puts greater focus on energy independence, particularly for Europe, and will further accelerate investment into renewable energy capacity build-out in our view. On the supply side, we are encouraged by what we are hearing from management teams in terms of maintaining their focus on capital discipline. Longer-term, ill-discipline remains a risk but, regardless, increases in capital expenditure would take some time to feed through into new supply given the time-lags associated with mining projects.

Mining companies are generally in robust financial shape today with strong balance sheets and high levels of free cash flow being generated. Finally, we view mining equities as an effective way to hedge portfolios against persistent inflationary pressures whilst, despite recent outperformance, valuations continue to look attractive in our view.
All data points are in USD terms unless stated otherwise.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

Global commitments to net zero are changing the landscape for commodities, says Olivia Markham, Co-Manager of the BlackRock World Mining Trust plc. This creates a strong backdrop for the year ahead. 

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.

2021 was a good year for the mining sector, with high earnings and rising dividends driving improving share price performance for many companies. Many investors are asking whether the cycle may be drawing to a close. Far from it, at BlackRock we believe we are only partially through a material multi-decade investment cycle linked to net zero.

The drive by global governments to move to net zero is changing the landscape in the mining sector. Around 80% of the world’s GDP (Gross domestic product) is now under a net zero commitment¹.To achieve these ambitious goals, countries will need to significantly change their energy infrastructure. This forms an important part of President Joe Biden’s US $1.2 trillion infrastructure bill and the European ‘Green Deal’, which, in turn, drives demand for commodities in particular.

The commodity market is supplying the necessary ingredients for society to achieve net zero. This is largely focused on the key metals needed for the electrification of the economy – copper, cobalt, lithium, nickel and rare earths. These are going to be vitally important in building the necessary solar, wind, grid improvements and electric vehicles required for society to move towards a lower carbon future.

Supply constraints

Supply in many of these areas is constrained. This is partly due to short-term considerations such as bottle necks and supply chain problems caused by Covid. Russia’s invasion of Ukraine is also leading to supply disruption, pushing commodity prices higher. here are also more fundamental and longer lasting problems at work – the increasing maturity of certain mines, declining grades, plus environmental, social and governance considerations affecting the way mines operate. Water availability is also becoming increasingly problematic. This makes it increasingly challenging for the mining sector to bring on supply at a sufficient pace to meet demand.  

Also, these supply problems come after a period of considerable discipline on the part of many mining companies. Capital has been withheld, which has also constrained supply over the last decade.

The recent trend in copper illustrates this supply dynamic. Copper supply has regularly underdelivered on expectations, often by as much as 5% of the global copper industry annually. Compounded over time, this creates a significant deficit. The world’s largest copper producer, Chile, has dedicated billions of dollars of investment, but has not been able to increase supply since 2016².

In our view, this means commodity prices need to stay sufficiently high to incentivise more supply. As demand for green infrastructure picks up, copper demand, related to solar, wind and electric vehicles, is set to double by the end of this decade. This is replicated across other commodities as well. Against this backdrop, the move to net zero is likely to create a significant investment cycle.

Carbon-heavy industries

There are other elements to the net zero progression that need to be considered. For example, it has changed the way we think about energy-intensive commodities such as steel and aluminium. Historically, the carbon impact of mining these commodities has not been incorporated into their pricing. As countries around the world start to impose carbon pricing, it could prompt a significant change. In the case of aluminium, an energy intensive commodity, we expect low carbon producers with access to renewable power to benefit as carbon prices increase the cost of production for thermal coal powered smelters and customers increasingly look to pay a premium for low carbon produced aluminium.  In the BlackRock World Mining Trust, we have exposure to low carbon producers of aluminium and steel that we believe will benefit from this trend.

Valuations for mining companies still look attractive, even after a strong year for the sector. The shares trade at attractive valuations relative to global equity markets and relative to their own history. Dividends are strong, as are balance sheets. The changes brought about by net zero are not implied within valuations. As inflation expectations increase, commodity prices tend to move higher.

China is another consideration for the mining sector today. It has been a strong source of demand for commodities for the past two decades. It slowed significantly in the second half of 2021 and there was a pullback in some commodity prices as a result, notably iron ore. However, China appears to be moving towards stabilising the economy, increasing credit availability, and has resumed a number of infrastructure projects which should be supportive for demand in 2022.

The war in Ukraine has introduced a new dynamic into the commodities complex. Should we see a significant de-escalation in the present situation then prices for commodities are likely to ease in the short term. However, over the medium to long term we see countries reliant on Russian commodities, most notably energy, look to accelerate their renewable plans to secure and diversify their energy needs which in turn increases demand for the commodities that enable the transition.

We remain optimistic on the outlook for the sector in 2022. Commodity markets are tight today with very low levels of inventories and limited new supply growth on the horizon. Demand is set to benefit as the economy continues to recover post Covid and global infrastructure spending commences this year. The move towards net zero is a multi-decade investment cycle that will require a significant amount of commodities to enable it. When combined with the constraints on supply, we expect many of the commodity markets to remain tight for a number of years to come, which is supportive of prices.

This material is not intended to be relied upon as a forecast, research or investment advice and is not a recommendation, offer or solicitation to buy or sell any securities or financial product or to adopt any investment strategy. The opinions expressed are from BlackRock as of March 2022 and may change as subsequent conditions vary.

¹University of Oxford, November 2021

²Trading Economics, November 2021

For more information on how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

Risk warnings

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

Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.

Trust Specific Risks

Exchange rate risk: The return of your investment may increase or decrease as a result of currency fluctuations.

Emerging markets risk: 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.

Gold/Mining funds risk: 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.

Gearing risk: Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.

Important Information

Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

BlackRock has not considered the suitability of this investment against your individual needs and risk tolerance. To ensure you understand whether our product is suitable, please read the fund specific risks in the Key Investor Document (KID) which gives more information about the risk profile of the investment. The KID and other documentation are available on the relevant product pages at www.blackrock.co.uk/its. We recommend you seek independent professional advice prior to investing.

This material is marketing material. Any research in this material has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.

This material is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.

© 2022 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, BUILD ON BLACKROCK and SO WHAT DO I DO WITH MY MONEY are trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.

All information is at 28 February 2022 and unaudited.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

Performance at month end with net income reinvested
 

	One Month	Three Months	One Year	Three Years	Five Years
Net asset value	15.2%	23.9%	32.2%	101.9%	116.6%
Share price	15.6%	36.3%	29.1%	140.4%	160.1%
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*	12.4%	17.6%	25.7%	70.4%	75.0%

* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream

At month end

Net asset value (including income)1:	722.93p
Net asset value (capital only):	690.73p
1 Includes net revenue of 32.20p
Share price:	728.00p
Premium to NAV2:	0.7%
Total assets:	£1,493.8m
Net yield3:	5.8%
Net gearing:	11.5%
Ordinary shares in issue:	184,181,116
Ordinary shares held in Treasury:	8,830,726
Ongoing charges4:	0.9%

² Discount to NAV including income.

³ Based on a first interim dividend of 4.50p per share declared on 29 April 2021, a second and third interim dividend of 5.50p per share declared on 19 August 2021 and 18 November 2021 respectively, and a final dividend of 27.00p per share declared on 8 March 2022, all in respect of the year ended 31 December 2021.

⁴ Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2021.

Country Analysis	Total Assets (%)
Global	72.5
Latin America	6.9
Australasia	5.1
United States	4.5
Canada	3.3
Other Africa	3.2
South Africa	1.7
Indonesia	1.4
Russia	0.6
United Kingdom	0.2
Net Current Assets	0.6
	—–
	100
	=====
Sector Analysis	Total Assets (%)
Diversified	40.5
Copper	21.6
Gold	13.9
Steel	8.3
Industrial Minerals	4
Aluminium	3.4
Iron Ore	3.2
Platinum Group Metals	2.9
Nickel	1.4
Zinc	0.2
Net Current Assets	0.6
	—–
	100
	=====

Ten largest investments

Company	Total Assets (%)
Vale:
Equity	5.9
Debenture	3.1
Anglo American	7.9
Glencore	7.6
BHP	7.6
Freeport-McMoRan	5.9
ArcelorMittal	5.1
Rio Tinto	4.1
Teck Resources	3.8
First Quantum Minerals:
Equity	2.8
Bond	0.8
Newmont Mining	3.1

Asset Analysis	Total Assets (%)
Equity	93.3
Preferred Stock	3.1
Bonds	2.9
Warrants	0.1
Net Current Assets	0.6
	—–
	100.0
	=====

Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:

Performance

The Company’s NAV returned +15.2% in February, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +12.4% (Performance figures in GBP).

February was a difficult month for equity markets, as concerns around Russia’s invasion of Ukraine dominated headlines. At the beginning of the month, investors were focused on central bank interest rate hikes and the potential impact this may have on growth. However, in the second half of the month, attention was refocused on the conflict in Ukraine. Russia is a significant exporter of commodities, particularly oil and gas, leading to Brent oil and European natural gas prices rising during the month. These higher energy prices could fuel higher or more persistent inflation.

Against this backdrop, the iron ore (62% fe.) price came under pressure, returning -5.7% as the physical market remains relatively weak. Performance across the other mined commodities was positive with aluminium, copper, nickel and palladium prices rising by +11.1%, +3.6%, +8.0% and +2.6% respectively. Against an uncertain macroeconomic backdrop, gold bullion also rose, with the precious metal returning +6.0% in February.

On 4 March 2022 the Company’s Board announced that on 28 February 2022 BlackRock had suspended the purchase of all Russian securities in its active and index portfolios and that as at the close of 3 March, 0.12% of the Company’s net assets (with a value of £1.74m) was in securities of companies whose principal activities were in Russia.

Strategy and Outlook

We believe the outlook for mined commodity prices remains robust, whilst mining shares offer attractive value. Recovering global economic growth, accommodative monetary policy, rising government spending and increased focused on green capital investment all point towards strong demand. Meanwhile, supply is constrained following years of capital discipline from the producers and we are seeing no signs that this is set to change.

We are encouraged by what we are hearing from management teams in terms of maintaining their focus on capital discipline. Longer term, ill-discipline remains a risk but, regardless, increases in capital expenditure would take some time to feed through into new supply given the time-lags associated with mining projects. We are also seeing inflationary data increase and commodities have traditionally been a core way for investors to both protect themselves from this but also benefit from such trends.

We believe the best risk-adjusted opportunity within the Company today is in the shares of mining companies that are in robust financial positions with strong balance sheets and high levels of free cash flow. Mining companies are continuing to return capital to shareholders through dividends and buybacks.

All data points are in USD terms unless stated otherwise.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

BlackRock World Mining Trust plc (LON:BRWM) has provided its Annual Results Announcement for the year ended 31 December 2021.

PERFORMANCE RECORD

	31 December  2021	31 December  2020
Net assets (£’000)¹	1,142,874	930,825
Net asset value per ordinary share (NAV) (pence)	622.21	536.34
Ordinary share price (mid-market) (pence)	589.00	522.00
Reference Index2 – net total return	5,258.16	4,566.93
Discount to net asset value 3	5.3%	2.7%
	—————	—————
Performance (with dividends reinvested)
Net asset value per share3	+20.7%	+31.8%
Ordinary share price3	+17.5%	+46.7%
Reference Index2	+15.1%	+20.6%
	=========	=========

	Year ended  31 December  2021	Year ended  31 December  2020	Change  %
Revenue
Net revenue profit after taxation (£’000)	78,910	35,451	+122.6
Revenue return per ordinary share (pence)4	43.59	20.40	+113.7
	—————	—————	—————
Dividends per ordinary share (pence)
– 1st interim	4.50	4.00	+12.5
– 2nd interim	5.50	4.00	+37.5
– 3rd interim	5.50	4.00	+37.5
– Final	27.00	8.30	+225.3
Total dividends paid and payable	42.50	20.30	+109.4
	=========	=========	=========

¹               The change in net assets reflects market movements, dividends paid and the buyback and reissue of ordinary shares during the year.
²               MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (net total return).
³               Alternative Performance Measures, see Glossary in the Annual Report and Financial Statements.
⁴               Further details are given in the Glossary in the Annual Report and Financial Statements.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

CHAIRMAN’S STATEMENT

HIGHLIGHTS

·        Record total dividend +109.4%

·        NAV per share total return +20.7%¹

·        Share price total return +17.5%¹

PERFORMANCE
I am delighted to be able to report on another excellent year for your Company.

Over the twelve months to 31 December 2021, the Company’s net asset value per share (NAV) returned +20.7%¹ (31 December 2020: 31.8%¹) and the share price +17.5%¹ (31 December 2020: 46.7%¹). In comparison, over the same period the Company’s Reference Index, the MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (net total return), returned +15.1%, the FTSE All-Share Index returned +18.3% and the UK Consumer Price Index (CPI) increased by 5.4%.

The average prices achieved for almost all commodities during the year, and base metals in particular, were substantially ahead of 2020’s levels and these helped drive this year’s exceptional growth in revenue. This was the standout feature of the year and has resulted in total dividends increasing by 176.3% compared to last year.

NAV growth, after a strong first half, was more subdued in the final two quarters, largely reflecting a deceleration in economic growth in China and concerns surrounding elements of the property development sector there.

A detailed commentary on the portfolio’s performance, its positioning, and how Environmental Social and Governance (ESG) factors impact on investment selection, can be found in the Investment Manager’s Report, alongside the investment outlook for the forthcoming year. Since the year end and up until the close of business on 2 March 2022, the Company’s NAV has increased by 20.2% and the share price has increased by 28.7%.

OVERVIEW
The themes which have characterised the sector in recent years continue to apply. Strong capital discipline has limited new supply at a time when government stimulus, including through infrastructure spending in the US and Europe, has boosted demand. In many sectors of the economy, increased demand has been met with bottlenecks, as post lockdown activity has picked up, leading to disruptions in supply chains and, often, higher prices.

In the mining sector the dynamic looks more structural. The obstacles to bringing on new supply have increased, with greater focus on the environmental and social impact of new mining activity, including factors such as water availability and usage. These increase the return hurdles required to justify new investment. In addition, the grades from existing mines have often continued to decline as the mines mature and forecasts of production output in recent years have also generally been too optimistic. On the demand side, the pressing need to decarbonise economic activity in forthcoming decades will create further pressure on all commodities associated with the electrification of energy production and transportation, such as copper, nickel, lithium and cobalt.

Progress has also been made this year in how leading mining companies have responded to the challenge of improving their ESG credentials and your Investment Manager addresses this in their report.

REVENUE RETURN AND DIVIDENDS
The Company’s revenue return per share for the year amounted to 43.59p compared with 20.40p for the previous year, representing an increase of 113.7%.

During the year, three quarterly interim dividends of 4.50p, 5.50p and 5.50p per share were paid on 25 June 2021, 24 September 2021 and 24 December 2021. The Board is proposing a final dividend payment of 27.00p per share for the year ended 31 December 2021. This, together with the quarterly interim dividends, makes a total of 42.50p per share (2020: 20.30p per share) representing an increase of 109.4% on payments made in the previous financial year and, as in past years, all dividends are fully covered by income. In accordance with the Board’s stated policy, the total dividends represent substantially all of the year’s available income.

Subject to approval at the Annual General Meeting, the final dividend will be paid on 19 May 2022 to shareholders on the Company’s register on 18 March 2022, the ex-dividend date being 17 March 2022.

It has been an exceptional year for dividend receipts. The Company’s income is highly dependent on the dividends paid by the companies it invests in. It should not be assumed that the very high level of these dividends will continue this year or that the Company’s revenue return, and accordingly the Company’s total dividends, will be at the same level as last year. It remains the Board’s intention to seek to distribute substantially all of the Company’s available income in the future.

DISCOUNT CONTROL
The Board recognises the importance to investors that the market price of the Company’s shares should not trade at a significant discount to the underlying NAV. Accordingly, the Board monitors the Company’s discount to NAV and will look to buy back shares in normal market conditions if it is deemed to be in shareholders’ interests. During the year, a total of 69,698 shares were purchased at a price of 560.76p per share for a total cost of £393,000. All shares have been placed in treasury.

I am pleased to report that in the first half of the year the Company’s shares were trading at a premium and the Company was able to reissue 10,200,000 ordinary shares from treasury for a net consideration of £63,187,000 at an average price of 619.48p per share and an average 0.9% premium to NAV. Since the year end and up to 2 March 2022, a further 875,000 ordinary shares have been reissued from treasury for a total consideration net of costs of £6,281,000. As at 2 March 2022 the premium stood at 1.4%.

Resolutions to renew the authorities to issue and buy back shares will be put to shareholders at the forthcoming Annual General Meeting.

ESG INTEGRATION AND SOCIALLY RESPONSIBLE INVESTMENT
As a Board we are conscious that ESG criteria are increasingly at the forefront of investors’ minds. Given the nature of mining as an industry, your Board has a strong focus on ESG and believes that it is important that our Company’s investee companies operate in a responsible and sustainable way having regard to the interests of all their stakeholders, whether these are shareholders, employees, customers, regulators or suppliers. The Board is also aware that ESG issues and risks must be considered when investing in the Natural Resources sector and, as a general approach, the Company will not invest in companies which the Investment Manager considers to have high ESG risks and no plans to address existing deficiencies.

Our Manager, BlackRock, has an Investment Stewardship team which is responsible for protecting and enhancing the value of your Company’s investments through engagement with companies to encourage business and management practices that support sustainable financial performance over the long term. Further information can be found in the Strategic Report below.

ANNUAL GENERAL MEETING
The Company’s Annual General Meeting (AGM) will be held at the offices of BlackRock at 12 Throgmorton Avenue, London EC2N 2DL on Friday, 6 May 2022 at 11.30 a.m. Details of the business of the meeting are set out in the Notice of Meeting in the Annual Report and Financial Statements.

At present UK Government restrictions on public gatherings are no longer in force in connection with COVID-19 and the AGM can be held in the normal way with physical attendance by shareholders. However, shareholders should be aware that it is possible that such restrictions could be reimposed prior to the date of the AGM. In such event, these restrictions could mean that the AGM is required to be held as a closed meeting as happened last year with physical attendance limited to only a small number of attendees comprising the required quorum for the meeting and those persons whose attendance is necessary for the conduct of the meeting, and that any other persons will be refused entry. Accordingly, all shareholders are recommended to vote by proxy in advance of the AGM and to appoint the Chairman of the meeting as their proxy. This will ensure that shareholders’ votes will be counted even if they (or any appointed proxy) are not able to attend. All votes will be taken by poll so that all proxy votes are counted. Appointing a proxy does not prevent a shareholder attending the AGM in person.

The Company may impose entry restrictions on persons wishing to attend the AGM (including, if required, refusing entry) in order to secure the orderly conduct of the AGM and the safety of the attendees. All shareholders intending to attend should either be fully vaccinated or obtain a negative COVID-19 test result before entering the venue. Negative test results must be obtained no earlier than one day before entering the venue and fully vaccinated shareholders are also strongly encouraged to get tested. Shareholders who have recovered from COVID-19 for 90 days from the date of their infection are exempt from the above.

Attendees will also be required to wear a face covering at all times within the venue except when seated in the relevant meeting room. Shareholders are also requested not to attend the AGM if they have tested positive for COVID-19 in the 10 days prior to the AGM, are experiencing new or worsening COVID-19 related symptoms, have been in close contact with anyone who is experiencing symptoms or has contracted COVID-19 during the 10 days prior to the AGM or are required to self-isolate pursuant to UK Government guidance.

OUTLOOK
In the short term our Investment Manager is optimistic that the Chinese economy is now accelerating again after the dip seen in the second half of last year and metals and mining stocks have certainly made a strong start to 2022. Although the risk of further disruption from new COVID-19 variants cannot be ruled out, the most recent news on the milder impact of the Omicron variant has been encouraging. Last year’s exceptional growth in revenue is unlikely to be repeated, but our Investment Manager remains optimistic about the sector’s prospects in the medium term.

Much of the new demand for metals over the last two decades resulted from the urbanisation of the Chinese economy. It is possible that the drive to decarbonise economic activity will have a similar long-term structural impact. It may also be the case that the investment required to supply the raw materials for this transformation will sustain prices for longer than in previous cycles; higher prices will be needed to provide the incentive to invest to meet this demand.

Last year’s COP26 climate conference in Glasgow brought home the urgency of the need for radical action to tackle global warming. As your Investment Manager points out, the holdings in your Company will play a huge part in supplying the raw materials necessary for the world to transition to net zero by 2050. This imperative, and a return to sustainable economic growth following the pandemic, provide strong underpinning for your Company’s prospects.

At the time of writing geopolitical tensions remain very high following Russia’s invasion of Ukraine. As at 3 March 2022, 0.1% of net assets (with a value of £1.7 million) was in securities with exposure to companies whose principal activities are in Russia. BlackRock also announced on Monday, 28 February 2022, that it had suspended the purchase of all Russian securities in its active and index funds.

The appalling humanitarian consequences of the war are already evident. It is too early to assess the long-term implications of these events but it seems inevitable that they will lead to higher volatility in commodity prices and likely that they will add to short-term concerns on inflation.

DAVID CHEYNE
Chairman
7 March 2022

¹         Alternative Performance Measures. All percentages calculated in Sterling terms with dividends reinvested. Further details of the calculation of performance with dividends reinvested are given in the Glossary in the Annual Report and Financial Statements.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

INVESTMENT MANAGER’S REPORT

PORTFOLIO PERFORMANCE
The last few years have been tremendous for the resources sector and in turn for the Company. We are pleased to report that 2021 was another year of positive returns but sadly not as much as expected given the stark difference between the first half of the year and the second. It really was a year of two halves as seen in the chart on page 9 of the Annual Report and Financial Statements. During first six months of the year ended 31 December 2021, the NAV of the Company returned +17.4% with dividends reinvested and the share price total return was +18.9%. This compares to a NAV and share price total return of 2.8% and -1.2% for the second half of 2021. There is more detail on the reasons behind this later in the report but, in summary, the huge moves early in the year were met with a softening in demand, especially for iron ore in China, as well as profit taking in other commodities.

2021 was a very eventful year. Ongoing COVID-19 related disruptions were ever present with waves of, at first, the Delta variant and then the Omicron variant as the year drew to a close. In addition, the global economy was impacted by supply chain issues, especially for semi-conductor chips, which pulled back Gross Domestic Product (GDP) growth from the elevated levels seen at the start of the year. Despite these challenges, the resources sector benefited from margin expansion as commodity prices rose faster than inflation. Capital discipline by and large remained in place, aside from a handful of new projects, leaving shareholders to benefit from record levels of dividends and share buy backs.

For the year as a whole, the NAV total return of the Company was up by 20.7% (31 December 2020: 31.8%) with dividends reinvested and the share price total return was up by 17.5% (31 December 2020: 46.7%). This compares to the FTSE 100 Index total return which was up by 18.4%, the UK Consumer Price Index (CPI) increase of 5.4% and the Company’s Reference Index, the MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (net total return), which was up by 15.1% (all numbers are in British Pound Sterling terms).

ONGOING RECOVERY
Following the COVID-19 related economic impacts seen in 2020, this year was a reversal from those lows. Economic growth around the world bounced back sharply on the back of accommodative financial policies put in place by Governments during the prior year. Business support packages covered disruption, lowered tax rates and for some people there was wage protection. These were combined with record low interest rates and increased access to government backed finance schemes. The end result was a huge increase in liquidity across the world which muted the worst of the economic downturn caused by COVID-19.

These measures have played out in a whole range of ways. One has been the repricing of assets such as property, commodities, equities, art and other tangible investments that should preserve purchasing power through time. The shortage of income has led to investors paying higher prices for securities that offer income as well as premiums for growth businesses. The prospect of inflation on the back of loose monetary policy also saw a huge rally in index linked bonds and this even flowed through into the crypto currency space with bitcoin and other virtual assets moving to record high prices. At the other end of the scale, government bonds seem to have ended a multi decade bull market as the prospect of interest rate increases loom in 2022 and beyond.

The moves in financial assets have masked other consequences from COVID-19. The huge drop in oil demand as economic activity collapsed only added to the existing Environment Social and Governance (ESG) related pressure for producers to reduce investment in future supply. This tightened up the market to such an extent that when demand recovered in 2021 prices soared due to the lack of spare capacity in the market. Many commodities are now out of balance, with deficits commonplace across the market and prices reflecting the situation.

ESG INTEGRATION AND THE SOCIAL LICENCE TO OPERATE
During the last two years we have made specific mention of the way in which the Company manages risks related to ESG and the social licence to operate. These have been covered in other parts of the Annual Report but for reference the text below sets the framework for how this is done:

“As part of BlackRock’s structured investment process, ESG risks and opportunities (including sustainability/climate risk) are considered within our fundamental analysis of companies and industries and we work closely with BlackRock’s Investment Stewardship team (BIS) to assess the governance quality of companies and investigate any potential issues, risks or opportunities. 

As part of our approach to ESG integration, we use ESG information when conducting research and due diligence on new investments and again when monitoring investments in the portfolio.

As an extractive industry the mining sector naturally faces a number of ESG challenges. However, we feel the sector can also provide benefits to society through the provision of critical infrastructure, taxes and employment to local communities, and enabling the carbon transition through the production of sustainable metals.”

As part of our commitment to consideration of ESG information and risks as being integral to our investment process to build and manage the portfolio:

·        As a general approach, the Company will not invest in companies which have high ESG risks and which we consider to have no plans to address existing deficiencies.

·        We are also challenging the executives of the portfolio companies in which we invest to set out how their current business plans are compatible with achieving a net zero carbon emissions economy by 2050.

·        There will be cases where a serious event has occurred and, in that case, we will assess whether the investee company is taking appropriate action to resolve matters before deciding what to do.

·        There will be companies which have derated on the back of an ESG event or generally poor ESG practices and there may be opportunities to invest at a discounted price. However, we will only invest in these value-based opportunities if we are satisfied that there is evidence that the company’s culture has changed and that better operating practices have been put in place.

During the year the main areas of focus remained on ESG issues relating to Rio Tinto, Norilsk Nickel and Vale. The Investment Manager engages with these portfolio companies and the Board receives regular updates at its meetings. By way of an update:

Rio Tinto – during the year the company made progress on announcing new CEO and CFO positions, as well as adding heritage expertise to the board. In December 2021, Dominic Barton was appointed as Chairman and he is expected to start in the second quarter of 2022. The company also published a comprehensive external review of its workplace culture, commissioned as part of its commitment to ensure sustained cultural change across its global operations.

Norilsk Nickel – the company had a number of new environmental issues and fatalities. The Company exited its holding in March 2021 despite the strong outlook for the commodities that the company produces.

Vale – the company has continued its journey to raise its ESG profile following the tragic tailings related events from the last decade. On the Governance front, a new Board was elected including the appointment of Ollie Olivera who left the Board of the Company to join Vale as a non-executive director.

	31 December 2021	% Change in 2021	% Change average  prices 2021 vs 2020
Commodity
Gold US$/ounce	1,822	-4.0	1.7
Silver US$/ounce	23	-11.8	22.5
Platinum US$/ounce	959	-10.8	23.3
Palladium US$/ounce	1,973	-16.8	9.4
Copper US$/pound	4.42	25.7	50.6
Nickel US$/pound	9.47	26.1	33.7
Aluminium US$/pound	1.27	42.2	45.1
Zinc US$/pound	1.63	31.5	32.5
Lead US$/pound	1.06	18.3	20.5
Tin US$/pound	17.86	91.6	88.9
Iron Ore (China 62% fines) US$/tonne	215.5	-23.9	47.7
Thermal Coal (fob Newcastle) US$/tonne	176.6	101.3	127.3
Metallurgical Coal US$/tonne	342.0	237.0	76.2
Lithium (Battery Grade China) US$/kilogram	35.95	453.1	107.7
West Texas Intermediate Oil (Cushing) US$/barrel	75.21	55.8	72.1
	=========	=========	=========

Sources: Datastream and Bloomberg.

STAND OUT YEAR
At the half year stage we wrote about the clean sweep of price rises and, despite some falls in the second half, the average prices for the year, the most important thing for earnings, have been stunning across the board. This year we have seen new highs in nine commodities: iron ore US$233/tonne, thermal coal US$270/tonne fob Newcastle, copper US$11,300/tonne, tin US$41,118/tonne, bauxite US$63/tonne, palladium US$2,985/ounce, lithium spodumene US$1,525/tonne, hard coking coal US$346/tonne fob and U.S. hot-rolled coil steel US$1,960/tonne. Iron ore has subsequently fallen back and is now lower than in 2020.

Within the commodities suite, base metals have seen huge rises with copper the standout for the Company’s portfolio given the large weighting to companies like Freeport-McMoRan, First Quantum Minerals and Sociedad Minera Cerro Verde. However, other commodities have been equally strong, such as zinc and nickel. Even the more unexciting metals such as aluminium delivered significant increases. All of these moves should feed through into the full year earnings and, as mentioned earlier, if they hold up in 2022 should help to mitigate the impact of lower iron ore prices when it comes to dividends.

Precious metals were generally a lot weaker in the second half of 2021, continuing the downtrend from the peaks that were reached during the prior twelve months. In particular, gold has failed to regain ground despite the supportive macro backdrop of rising inflation and low interest rates. In the Platinum Group Metals (PGM) space, prices softened as automotive producers had to cut output on the back of the semi-conductor chip shortages.

As mentioned in the Interim Report, steel is a key exposure for the Company with large holdings in European and US steel producers. Record prices were reached over the summer months and the associated huge margins caused share prices to move higher. It is pleasing to see most of the steel manufacturing companies in the portfolio continue to be disciplined in allocating capital despite some peers reverting back to old ways. It is our hope that this trend continues, as the value accretion from share buybacks is enormous given where the shares are trading.

INCOME, INCOME AND MORE INCOME
In last year’s Annual Report and again in the Interim Report we flagged the prospect that the Company was well placed to receive record levels of income given the excellent pay-outs being made by the underlying holdings. We are delighted to report that this has played out even better than expected. The chart on page 12 of the Annual Report and Financial Statements highlights the 121.5% growth in income received this year versus prior years, as well as showing how it has changed by each source. Not only has there been tremendous growth in ordinary dividends, but special dividends also increased substantially.

The key reason for the income growth has been dividends from the large diversified mining companies which benefited from much higher iron ore prices than expected. Given that prices today are lower than the average realisations received during 2021, it is likely that they will not be able to match the dividends paid last year. However, the outlook is bright for other parts of the portfolio such as copper names. Copper miners who have spent years paying down debt or spending on new mines now seem to have dealt with these cash consuming constraints leaving them free to boost shareholder returns in 2022. One example is Freeport-McMoRan which restarted dividends in 2021, raised them at the end of the year and announced a new policy which gives it flexibility to boost them should prices remain at levels in excess of its needs. We hope that other base metal producers which have historically shied away from dividends follow this lead and reward their shareholders now that producers are benefiting from these windfalls.

DECARBONISATION, A MULTI DECADE DRIVER FOR THE SECTOR
Decarbonising power, industrial manufacturing, transportation and food is a key structural trend that will persist for decades to come. Over the twelve months in the lead up to COP26 we saw announcements from major economies, most notably China and the United States of America (USA), regarding their commitment to reach net zero. The scale of investment required to meet this goal is enormous, with commodities playing a key role in this transition.

From a mining sector perspective, we look at decarbonisation from two angles. The first looks at the impact on demand for the various commodities and which commodity markets will see significant change once carbon is appropriately priced. The second area is how the mining sector is reducing emissions from their own operations (scope 1 & 2 emissions), as well as their customers’ emissions (scope 3).

In our view, the market is underestimating the impact that the energy transition will have on commodity markets, particularly on the supply side. Copper, battery related materials (lithium, cobalt, nickel) and rare earths are key beneficiaries. Each of these commodities will see significant demand growth as renewable energy investment is increased, the grid is upgraded, electric vehicle penetration grows and the requirement for battery storage increases. Another interesting dynamic is the structural change we expect to see in various commodity markets once carbon is appropriately priced. This is most prevalent for the aluminium and steel industries given their energy intensity. China’s steel industry alone accounts for 5% of global greenhouse gas (GHG) emissions so it is imperative for these upstream sectors to be addressed. As part of this transition, we expect older more pollutive capacity to be curtailed which should improve industry structure and margins. As carbon taxes are rolled out globally there will be clear winners and losers where those companies with existing access to low carbon power such as Norsk Hydro (1.6% of the portfolio)* or companies with superior decarbonisation technology will benefit. Not only will these companies face less carbon taxes, but they may also be able to charge premiums for their products given the demand for low energy and sustainable materials by customers.

Over the last year we have seen mining companies articulate how they will reduce their own emissions, with companies generally looking to reduce emissions by 30% by 2030, with many targeting net zero by 2050. Over the next decade, the reduction of emissions will be largely achieved by switching to a renewable power source for mining fleets, transportation and parts of the processing circuit. Beyond this it becomes more challenging to achieve net zero emissions and will require advancement in technology in areas such as green hydrogen for the hard to abate emissions. We are actively engaged with management teams on these goals and the capital and returns associated with it. Amongst the Company’s holdings, we view Australian based iron ore producer Fortescue Metals Group and diversified miner Anglo American as leading in this area.

BASE METALS
It was an exceptional year for the base metal complex with average prices increasing by 20% to 50% and a new all-time high set for the copper price. This year saw the strongest metal demand increase in history as global industrial activity recovered, broad based supply issues, energy shortages and low inventories kept physical markets tight with each of the base metals finishing the year in a deficit market position. This is a feature of the market not seen for a number of years and supports our conviction that commodity prices will remain above market expectations for many years to come due to structural supply constraints and global decarbonisation spending.

The first half of the year saw a very rapid increase in prices as China’s COVID-19 related stimulus fed into the real economy via the property market and broad-based infrastructure spending. The acceleration in Chinese demand was not sustainable and during the second half of the year, the Chinese Government put in a number of measures linked to the property sector, carbon emissions and energy usage to slow activity down. As discussed further below, this had a significant impact on the steel industry and in turn the iron ore price. However, the base metal prices proved largely resilient with average prices further increasing in the second half of the year. Part of this resilience has been due to a pick-up in demand from the rest of the world, namely the USA and Europe, creating a more diversified and robust demand outlook in our view. Given the dominance of China on commodity markets for much of the last two decades, as we look forwards towards the multi trillion-dollar spending required to achieve net zero targets, we expect to see more stable and resilient commodity demand which has the potential to create a global capex cycle akin to what we saw in the early 2000s.

Copper was the standout commodity for the Company in 2021 finishing the year up by 25.7%, with the average price 50% higher. After a very strong first half, the copper price proved largely resilient despite weakness in China’s property market highlighting tightness in the physical market with London Metal Exchange (LME) inventories dropping to the lowest level on record towards the end of the year. Copper is a clear beneficiary of the energy transition with more than 65% of copper used for applications that deliver electricity, whilst at the same time the industry is facing mine supply challenges resulting in a material deficit in the market longer term. We have consistently seen mine supply disappoint relative to market expectations and to the best of our knowledge there were no new major greenfield copper developments sanctioned in 2021 despite record high prices. The challenges to mine supply are further exacerbated by increased resource nationalism, ESG issues and permit requirements. Whilst we expect to see some mine supply growth in 2022 through projects that the Company has exposure to, including Ivanhoe Mines’ Kamoa-Kakula project in the Democratic Republic of Congo (DRC), Anglo American’s Quellaveco project and Teck Resources Quebrada Blanca Phase 2 (QB2) project, both in Chile, looking beyond that it is challenging for us to see how future supply meets anticipated growth.

As at 31 December 2021, the Company had 21.4% of the portfolio exposed to copper producing companies which significantly aided performance for the year. The Company’s largest copper exposure, Freeport-McMoRan (6.2% of the portfolio), continued to deliver operationally at Grasberg. This combined with high copper prices has allowed Freeport-McMoRan to deleverage faster than anticipated with the company increasing dividends and announcing a US$3 billion buyback in November. Among our other copper producers, Sociedad Minera Cerro Verde (1.7% of the portfolio) was the Company’s largest contributor to performance in 2021 with the shares up by 77% in US Dollar terms. Both volumes and earnings at Sociedad Minera Cerro Verde recovered during the year leaving it in a strong position to pay higher dividends going forward. We continue to be impressed with the operational performance of Ivanhoe Mines (2.4% of the portfolio), which has surpassed the market’s expectation of both the timing and production level of its Kamoa-Kakula asset in the DRC. This underpins our confidence in the management team’s ability to deliver value from its other assets including the Western Forelands in the future. Among our smaller holdings, Solaris Resources (1.5% of the portfolio) had an exceptional year increasing by 178.6% where it continues to report exceptional drilling results at its Warintza deposit in Ecuador which we believe has the potential to attract significant mergers and acquisition (M&A) interest from the majors if it starts to show Tier 1 characteristics.

Amongst the other base metals, the aluminium price was up by 42.2% benefiting from strong demand, production caps in China and global smelter curtailments due to rising energy costs. Aluminium, long regarded as the laggard amongst the base metals, is going through a period of structural change we believe with China reducing exports due to its greater focus on emissions and the incorporation of carbon prices benefiting producers with renewable power sources. The Company has direct exposure to this theme via its holding in Norsk Hydro (1.6% of the portfolio), Alcoa (1.7% of the portfolio) and Rio Tinto (4.2% of the portfolio) which all have hydro based aluminium production and are poised to benefit in an environment of market-based carbon pricing. The nickel market continued to tighten driven by strong stainless-steel demand which (accounts for 70% of primary nickel demand), as well as improving Electric Vehicle (EV) battery demand. We continue to see a tight market for battery grade nickel given increasing EV demand and persistent supply challenges to bring on battery grade nickel. Finally, zinc, which the Company has exposure to via Teck Resources and Glencore, is likely to see the largest metal deficit in 2022 as inventories have further declined on energy-linked European smelter cuts.

BULK COMMODITIES AND STEEL
It was very much a year of two halves for the iron ore market with record demand and prices translating into a new all-time high price for iron ore of US$239/tonne in the first half as steel producers scrambled to access material. However, it was a very different picture in the second half, as the Chinese Government put in place a number of measures ranging from direct output caps, emissions controls and energy restrictions to cool the economy and ensure that steel production did not exceed 2020 levels. Weakness in the Chinese property market and fears around the fallout from Evergrande exacerbated the situation which ultimately saw the iron ore price fall by US$120/tonne in the third quarter of 2021, with steel production finishing the year at levels not seen since the lows of 2016. In response, major producer Vale cut production of higher cost material which helped to stabilise the market which, combined with weaker production from Rio Tinto, saw the iron ore market finish in a less than feared surplus.

Recent commentary, focused on stabilising steel demand via property, infrastructure and credit availability, is encouraging and our expectation is that we will see a pick-up in steel demand post Chinese New Year and the Beijing Winter Olympics. We believe the steel industry is on the cusp of structural change with increased focus on carbon emissions from which, over the next two decades, we expect to see reduced production from pollutive blast furnace capacity transitioning towards lower carbon production (electric arc furnaces and hydrogen-based production) which will reduce overcapacity, improve margins and better position the industry once carbon taxes are introduced. The Company is invested in those steel companies that are already well positioned for this shift such as Nucor Corp (0.9% of the portfolio) and Steel Dynamics (1.6% of the portfolio). The Company is also invested in companies which have a first mover advantage such as ArcelorMittal (5.2% of the portfolio) through its investment in decarbonisation technology over recent years.

Coal markets have been some of the most interesting commodity markets over the last couple of years, with record prices being achieved for both metallurgical and thermal coal during the year. Tightness across coal markets has been driven by significant supply side distortion with China banning imports of Australian metallurgical and thermal coal, along with the spike in energy prices which saw the benchmark Australian thermal coal price reach US$270/tonne in October. Whilst coal (in particular thermal coal) faces longer-term demand headwinds linked to decarbonisation of steel and power in the near term, both markets face supply side shortages and a lack of investment particularly for thermal coal, and with producers focused on responsible run-off, may very well see the price exceed market expectations for a period of time. The Company has no exposure to pure play thermal coal producers, with thermal coal exposure limited to Glencore (7.7% of the portfolio) which is focused on a managed decline of their thermal coal asset base over time. Teck Resources (3.6% of the portfolio) is the Company’s primary exposure to metallurgical coal, which has been able to take advantage of the higher Chinese coking coal prices during the year given their Canadian asset base.

PRECIOUS METALS
Unlike the recovery fuelled performance of the industrial metals, the precious metals have remained largely rangebound in 2021, with the average gold price 1.7% higher than last year. The gold price continues to be driven by two opposing forces: concerns over rising inflation and excessive government debt, and on the other hand the impact of rate hikes with the US Federal Reserve indicating in December that it will begin raising rates in March 2022 in an effort to stem rising inflation. This is likely to see a strengthening US$ headwind to gold, but the key determinant of the gold price this year will be whether rate hikes prove sufficient to cool inflation. If this is not the case and inflation is more “persistent” and less “transitory”, we would expect real rates to decline further creating a constructive backdrop for gold. Typically, gold underperforms equities and the US Dollar heading into a rate hike cycle, but outperforms thereafter giving us confidence in the medium-term outlook for gold. While the silver price underperformed gold on a year-to-date basis, declining by 11.8%, the average price year-on-year was higher by 22.5% versus gold at +1.7%. We have seen a solid recovery in silver’s industrial demand over the last year, with longer-term upside potential from greater solar penetration and increasing usage of semi-conductors.

An encouraging feature of the gold equity market over recent years has been the increased focus on shareholder returns, with higher gold prices translating into higher margins, free cash flow and dividends. This trend has generally continued through 2021, albeit margins have been compressed through rising cost inflation. The portfolio finished the year with 16.4% exposure to gold equities, roughly half the peak exposure to gold equities in the first half of 2020. The underperformance of the gold equities has been notable over the last 18 months where we have maintained our strategy of focusing on high-quality producers which we see as best positioned to weather cost inflation and maintain production levels. Amongst our gold companies, Newmont Corporation’s (3.5% of the portfolio) performance continues to stand out in the sector, a reflection of its solid operational performance and cash return.

It has been a volatile year for the Platinum Group Metals (PGMs) with record pricing for the PGM basket during the first half, to then face a downturn in demand as the global chip shortage hit auto production towards the end of the year. With 40% to 80% of PGM end-use linked to the auto industry, prices came under significant pressure with the platinum price finishing the year -11%, palladium -17% and rhodium -20%. We expect to see improved demand for PGMs during the first half of 2022 as chip shortages ease and auto producers begin re-stocking raw materials. Whilst a lack of supply growth and increased PGM loadings on auto catalysts to meet rising emissions standards bodes well for the PGMs, the industry faces the structural headwind of the shift in demand from internal combustion engine vehicles to electric vehicles. The Company’s exposure to PGMs is via Impala Platinum (1.1% of the portfolio), Northam Platinum (1.2% of the portfolio), Sibanye Stillwater (0.8% of the portfolio) and Anglo American (7.5% of the portfolio) through its 78.5% ownership of Anglo Platinum. During the second half of the year, we saw a step-up in mergers & acquisitions (M&A) activity amongst the group with Sibanye Stillwater looking to further move into the battery materials space with the acquisition of a historically challenged Brazilian copper and nickel asset, whilst Northam Platinum and Impala Platinum entered into a bidding war for Royal Bafokeng Platinum. These are worrying trends as investors had hoped that strengthened balance sheets and improved free cash flow across the sector would allow the producers to deliver on their commitment to return cash to shareholders.

SUSTAINABLE METALS
The shift towards electric vehicles (EVs) continues to be one of the strongest trends in global markets. The market is anticipated to grow more than ten-fold by 2030 from 2020 levels, which creates opportunities for those companies supplying the materials that enable the transition. The Company is well placed to benefit from this given its exposure to the raw materials that go into EV batteries and the e-motor.

Transportation was significantly impacted by the COVID-19 pandemic with global passenger car sales falling 17% year-on-year in 2020. In 2021 car sales have been constrained by supply chain semiconductor shortages, although there is evidence of significant demand with price increases and shortages seen in the second-hand market.

The level of demand and price action in lithium surprised even the most optimistic of forecasters in 2021, with the Chinese Lithium Carbonate price ending the year at US$43.7/kilogram, up by 429% year-on-year. 2021 saw 153% growth in China for Battery and Plug-In EVs sales, up by 64% in Europe. We ended 2021 with the EV share of new car sales standing at 19.3% in China and 31.1% in Europe. The US market remains a significant growth opportunity, with sales lagging other markets like Europe and China and penetration rates at 6.2%. The Company has exposure to lithium via its holding in Sociedad Química y Minera de Chile ADR (SQM) (1.0% of the portfolio) which is expected to achieve higher pricing in 2022 due to the lagged nature of its contract pricing structure, along with Sigma Lithium (0.4% of the portfolio), which is developing a spodumene project in Brazil and has several supply agreements including to LG Chem, the world’s no. 2 battery maker.

A critical component of the electric car is the e-motor, which most commonly uses a Praseodymium-Neodymium (NdPr) magnet, an alloy of two rare earth elements (REE). The increased demand for EVs has resulted in increasing demand for NdPr, with the price up by 101% during 2021. REEs are commonly mined and processed in China and have been deemed of strategic importance by both Europe and the USA. The Company has exposure to REE through Lynas Corporation (1.4% of the portfolio), a REE miner and processor crucially based in Malaysia and Australia. In 2021 Lynas Corporation’s equity returned 154%.

EV battery raw materials include cobalt, where LME prices were up by 119% in 2021 as demand recovered driven by battery demand, particularly EV batteries. Significantly, Glencore announced the 2022 restart of the Mutanda mine in the DRC, which will most likely be ramped-up in a way that keeps the market balanced. Glencore (7.7% of the portfolio) rose by 66.9% during 2021, and is a globally significant cobalt producer which produced 22% of mine production in 2020 which is set to increase with Mutanda’s ramp-up.

2021 has seen growing excitement about the potential for hydrogen to disrupt the commercial vehicle market. Compared to batteries, hydrogen and fuel cells offer better energy density, improved range and faster refuelling, giving them an inherent advantage in efforts to decarbonise high utilisation transport like industrial trucks. That said, there are substantial hurdles to overcome, with costs needing to fall dramatically for the switch to be economic. We see the technology’s long-term potential but believe that we are still in the early stages of its development. Technologies involving platinum are crucial to the adoption of the hydrogen fuel cell; the Company has exposure to this theme via its PGM exposure.

ROYALTY AND UNQUOTED INVESTMENTS
At 31 December 2021 the Company has two unquoted investments, the OZ Minerals Brazil Royalty (1.5% of the portfolio), as well as an investment in Ivanhoe Electric/I-Pulse (1.2% of the portfolio). The Company has an additional quoted royalty investment, Vale Debentures (3.3% of the portfolio), with total royalty investments amounting to 4.8% of the Company’s portfolio. These, and any future investments, will be managed in line with the guidelines set by the Board as outlined to shareholders in the Strategic Report.

OZ Minerals Brazil royalty contract (1.5%)
In July 2014 the Company signed a binding royalty agreement with Avanco Minerals. The Company provided US$12 million in return for a Net Smelter Return (net revenue after deductions for freight, smelter and refining charges) royalty payments comprising 2% on copper, 25% on gold and 2% on all other metals produced from mines built on Avanco’s Antas North and Pedra Branca licenses. In addition, there is a flat 2% royalty over all metals produced from any other discoveries within Avanco’s licence area as at the time of the agreement.

In 2018 Avanco was acquired by OZ Minerals, an Australian based copper and gold producer, for A$418 million, with the royalty now assumed by OZ Minerals. Since our initial US$12 million investment was made, we have received US$19.2 million in royalty payments with the royalty achieving full payback on the initial investment. As at 31 December 2021, the royalty was valued at £18.2 million (1.5% of NAV) which equates to a 265.3% total return since our investment.

It has been a challenging operating environment in Brazil over the last 18 months primarily due to COVID-19. As expected, the Antas Mine ceased production in the middle of the year, with Pedra Branca steadily ramping-up during the second half with ore processed through the Antas processing facility. OZ Minerals had flagged the risk of not meeting the 10-15kt copper guidance during this year due to COVID-19, with production downgraded to 7kt-10kt copper and 5koz-8koz gold. Given the better-than-expected copper price and our conservative production assumption this year, it has had minimal impact on income, and we have confidence in production returning to planned levels during 2022. We continue to remain optimistic on the longer-term optionality provided by the royalty via the development of Pedra Branca West, as well as greenfield exploration over the licence area.

Vale debentures (3.3% of the portfolio)
At the beginning of 2019, the Company completed a significant transaction to increase its holding in Vale Debentures. The Debentures consist of a 1.8% net revenue royalty over Vale’s Northern System and Southeastern System iron ore assets in Brazil, as well as a 1.25% royalty over the Sossego copper mine. The iron ore assets are world class given their grade, cost position, infrastructure and resource life which is well in excess of 50 years. As at 31 December 2021 the Company’s exposure to the Vale Debentures was 3.3%.

It has been a remarkable environment for the iron ore market since the Company acquired the Debentures at the beginning of 2019. From a supply perspective, the iron ore market was significantly tightened following Vale’s tragic tailings dam collapse at the beginning of 2019 which has been further intensified as Vale has failed to meet its annual production guidance in 2020 and 2021. These supply issues combined with record steel demand in China has seen the iron ore price average at US$117/tonne since the beginning of 2019, a notable increase from the US$70/tonne iron ore price at the beginning of 2019 when the Company acquired the Debentures.

Despite the strong rally in the Debentures, we continue to see value with the current yield on the investment in excess of 10% which is attractive for a royalty instrument. This value opportunity has been recognised by other listed royalty producers Franco-Nevada and Sandstorm Gold royalties which have both acquired stakes in the Debentures since the sell-down occurred in 2021.

Whilst the Vale Debentures are a royalty, they are also a listed security on the Brazilian National Debentures System. As we have highlighted in previous reports, shareholders should be aware that historically there has been a low level of liquidity in the Debentures and price volatility is to be expected. However, we expect this to be improved following the recent sell-down in April 2021.

We continue to actively look for opportunities to grow royalty exposure given it is a key differentiator of the Company and an effective mechanism to lock-in long-term income which further diversifies the Company’s revenues.

Ivanhoe Electric/I-Pulse (1.2% of the portfolio)
In early August the Company made a US$20 million investment into Ivanhoe Electric/I-Pulse, an exploration and mining business focused on identifying and developing “electric metals” (copper, nickel, gold and silver) required for the energy transition. The exploration portfolio is focused in the USA where it has developed a proprietary exploration technology that has the ability to identify mineral resources at greater depths than existing methods. The team is led by Robert Friedland who has a successful track record of identifying and developing world class mineral deposits such as Voisey’s Bay, Oyu Tolgoi and Kamoa-Kukula.

The Company’s investment consists of an investment into the common shares of Ivanhoe Electric/I-Pulse, as well as convertible notes which convert at a discount to the initial public offering (IPO) price into Ivanhoe Electric shares. The company is targeting an IPO over the next six to twelve months and the exploration potential of this asset base is encouraging. Since making the investment, Ivanhoe Electric has successfully secured an option to acquire 100% of the Santa Cruz deposit, a historic high-grade copper oxide resource in Arizona. Earn-in spend is approximately US$100 million over the next three years with the management team focused on verifying the historic drilling to produce a 43-101 resource statement ahead of IPO in 2022. We believe this has potential to add significant value to our August 2021 entry price.

Jetti Resources
We are pleased to report that subsequent to the year-end the Company has made an investment into copper technology company Jetti Resources. Jetti Resources, alongside the University of British Colombia, has developed a new catalyst that improves copper recovery from primary copper sulphides (specifically from chalcopyrite, which is often uneconomic under conventional leach conditions). Jetti is currently testing at 23 projects at various stages, including five active pilots where they will look to integrate their catalyst into existing heap leach SX-EW mines to improve recoveries at a low capital cost. The technology has been demonstrated to work at scale at the Pinto Valley copper mine, with further deployments at different copper assets planned for this year. If industry adoption of Jetti’s technology continues to accelerate and is proven to work at scale, we see material valuation upside, with Jetti sharing in the economics of additional copper volumes recovered through the application of their catalyst.

DERIVATIVES ACTIVITY
The Company from time to time enters into derivatives contracts, mostly involving the sale of “puts” and “calls”. These are taken to revenue and are subject to strict Board guidelines on the use of derivatives which limit the exposure to an aggregate 10% of gross assets of the Group. In 2021 income generated from options was £7.1 million. This was lower than in the prior year as volatility levels made option writing less value accretive to the Company but nonetheless a number of opportunities presented themselves allowing healthy levels of income to be earned. At the end of the period the Company had 2.4% of net assets exposed to derivatives and the average exposure to derivatives during the period was once again less than 5%.

GEARING
At 31 December 2021, the Company had £113.3 million of net debt, with a gearing level of 9.9% of net assets. The debt is held principally in US Dollar rolling short-term loans and managed against the value of the debt securities and the high yielding royalty positions held by the Company. During the year, the Company sought to maximise the use of gearing against the equity holdings rather than debt securities. This was driven by the risk adjusted relative value available in shares where dividend yields were mostly in excess of the coupons being paid on the bonds. Since the investee companies also have strong balance sheets, it was opportune to gear up the equity portfolio of the Company since we were not adding debt to holdings that were already heavily leveraged themselves.

Shareholders should note that the total gearing available to the Company has increased during the year due to the rise in net assets but remains within the 25% of net assets limit set by the Board. On the back of this, facilities were refreshed with our lenders and now stand at £138.9 million for loans and £0.4 million for the overdraft. The cost of debt for the Company remains very low at 1.10% for US Dollar loans and 0.97% for Sterling loans and these are now linked to SOFR/SONIA following the demise of LIBOR.

OUTLOOK
2022 seems to have started well for the global economy with fears around the Omicron variant starting to wane as its impact seems to be less damaging than initially feared. With global growth still strong and inflation numbers higher than desired, it is likely that Central Banks will become less accommodative and start raising rates. Transitions such as this are always associated with higher periods of volatility as investors rotate portfolios to reflect the new environment.

Looking more closely at the commodity sector, the outlook remains as bright as it has been for the last few years. Prices for almost all metals are well supported by ongoing demand strength and limited new supply growth. In addition, current price levels generate margins that are high by historical standards meaning that the companies should continue to enjoy excellent levels of cash flow generation. If current capital allocation trends and tighter cost containment measures continue, shareholders should see further years of strong income but probably not the records seen in 2021, especially if the focus moves to share buy backs rather than dividends.

EVY HAMBRO AND OLIVIA MARKHAM
BLACKROCK INVESTMENT MANAGEMENT (UK) LIMITED
7 March 2022

*  Portfolio positions are shown as at 31 December 2021.

TEN LARGEST INVESTMENTS

1 = Vale^1,2,3 (2020: 1st)
Diversified mining group
Market value: £106,625,000
Share of investments: 8.5% (2020: 10.9%)

One of the largest mining groups in the world, with operations in 30 countries. Vale is the world’s largest producer of iron ore and iron ore pellets, and the world’s largest producer of nickel. The group also produces manganese ore, ferroalloys, metallurgical and thermal coal, copper, platinum group metals, gold, silver and cobalt.

2 = BHP³ (2020: 2nd)
Diversified mining group
Market value: £96,883,000
Share of investments: 7.7% (2020: 7.6%)

The world’s largest diversified mining group by market capitalisation. The group is an important global player in a number of commodities including iron ore, copper, thermal and metallurgical coal, manganese, nickel, silver and diamonds. The group also has significant interests in oil, gas and liquefied natural gas but has signed a binding share sale agreement for the merger of the oil and gas business with Woodside.

3 + Glencore (2020: 18th)
Diversified mining group
Market value: £96,651,000
Share of investments: 7.7% (2020: 1.7%)

One of the world’s largest globally diversified natural resources groups. The group’s operations include approximately 150 mining and metallurgical sites and oil production assets. Glencore’s mined commodity exposure includes copper, cobalt, nickel, zinc, lead, ferroalloys, aluminium, coal, gold and silver.

4 = Anglo American (2020: 4th)
Diversified mining group
Market value: £93,608,000
Share of investments: 7.5% (2020: 7.2%)

A global mining group. The group’s mining portfolio includes bulk commodities including iron ore, manganese and metallurgical coal, base metals including copper and nickel and precious metals and minerals including platinum and diamonds. Anglo American has mining operations globally, with significant assets in Africa and South America.

5 = Freeport-McMoRan (2020: 5th)
Copper producer
Market value: £77,970,000
Share of investments: 6.2% (2020: 5.2%)

A global mining group which operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum.

6 + ArcelorMittal¹ (2020: 13th)
Steel producer
Market value: £65,024,000
Share of investments: 5.2% (2020: 2.5%)

A multinational steel manufacturing group, with a focus on producing safe sustainable steel. The company has operations across the world and is the largest steel manufacturer in North America, South America and Europe.

7 – Rio Tinto (2020: 3rd)
Diversified mining group
Market value: £52,315,000
Share of investments: 4.2% (2020: 7.5%)

One of the world’s leading mining groups. The group’s primary product is iron ore, but it also produces aluminium, copper, diamonds, gold, industrial minerals and energy products.

8 + Teck Resources (2020: 15th)
Diversified mining group
Market value: £45,543,000
Share of investments: 3.6% (2020: 2.2%)

A diversified mining group headquartered in Canada. The group is engaged in mining and mineral development with operations and projects in Canada, the US, Chile and Peru. The group has exposure to copper, zinc, steelmaking, coal and energy.

9 – Newmont Corporation (2020: 6th)
Gold producer
Market value: £43,489,000
Share of investments: 3.5% (2020: 4.5%)

Following the acquisition of Goldcorp in the first half of 2019, Newmont Corporation is the world’s largest gold producer by market capitalisation. The group has gold and copper operations on five continents, with active gold mines in Nevada, Australia, Ghana, Peru and Suriname.

10 = First Quantum Minerals¹ (2020: 10th)
Copper producer
Market value: £36,575,000
Share of investments: 2.9% (2020: 4.2%)

An established growing copper mining company operating seven mines including the ramp-up of their newest mine, Cobre Panama, which declared commercial production in September 2019. The company is a significant copper producer and also produces nickel, gold and zinc.

¹    Includes fixed income securities.
²    Includes investments held at Directors’ valuation.
³    Includes options.
 

All percentages reflect the value of the holding as a percentage of total investments. For this purpose, where more than one class of securities is held, these have been aggregated.

Together, the ten largest investments represented 57.0% of total investments of the Company’s portfolio as at 31 December 2021 (ten largest investments as at 31 December 2020: 56.4%).

INVESTMENTS AS AT 31 DECEMBER 2021

	Main  geographical  exposure	Market  value  £’000	% of  investments
Diversified
Vale	Global	66,106	5.3
Vale Debentures*#^	Global	40,895	3.3
Vale Put Option 21/01/22 $13.84	Global	(376)	(0.1)
BHP	Global	97,174	7.7
BHP Put Option 20/01/22 $40.99	Global	(291)	–
Glencore	Global	96,651	7.7
Anglo American	Global	93,608	7.5
Rio Tinto	Global	52,315	4.2
Teck Resources	Global	45,543	3.6
Trident	Global	4,055	0.3
		—————	—————
		495,680	39.5
		=========	=========
Copper
Freeport-McMoRan	Global	77,970	6.2
First Quantum Minerals*	Global	36,575	2.9
Ivanhoe Mines	Other Africa	30,108	2.4
OZ Minerals Brazil Royalty#~	Latin America	18,162	1.5
OZ Minerals	Australasia	16,358	1.3
Sociedad Minera Cerro Verde	Latin America	21,895	1.7
Solaris Resources#	Latin America	19,046	1.5
Ivanhoe Electric/I-Pulse*#	United States	15,250	1.2
Antofagasta	Latin America	12,207	1.0
Ero Copper	Latin America	6,231	0.5
HudBay	Global	5,611	0.5
Lundin Mining	Global	3,945	0.3
SolGold	Latin America	3,777	0.3
Nevada Copper	United States	1,254	0.1
Sierra Metals	Latin America	706	0.1
		—————	—————
		269,095	21.5
		=========	=========
Gold
Newmont Corporation	Global	43,489	3.5
Barrick Gold	Global	35,042	2.8
Wheaton Precious Metals	Global	34,285	2.7
Franco-Nevada	Global	27,824	2.2
Northern Star Resources	Australasia	15,146	1.2
Polyus	Russia	14,567	1.2
Kinross Gold	Global	10,376	0.8
Polymetal International	Russia	9,929	0.8
Endeavour Mining	Other Africa	8,293	0.7
Kirkland Lake Gold	Australasia	5,942	0.5
		—————	—————
		204,893	16.4
		=========	=========
Steel
ArcelorMittal*	Global	65,024	5.2
Steel Dynamics	United States	20,377	1.6
Nucor Corp	United States	10,934	0.9
		—————	—————
		96,335	7.7
		=========	=========
Industrial Minerals
Lynas Corporation	Australasia	18,268	1.4
Iluka Resources	Australasia	13,004	1.0
Sociedad Química y Minera de Chile ADR	Latin America	12,924	1.0
Sigma Lithium#	Latin America	5,610	0.4
Sheffield Resources	Australasia	3,756	0.3
		—————	—————
		53,562	4.1
		=========	=========
Aluminium
Alcoa	Global	21,096	1.7
Norsk Hydro	Global	20,040	1.6
		—————	—————
		41,136	3.3
		=========	=========
Platinum Group Metals
Northam Platinum	South Africa	15,182	1.2
Impala Platinum	South Africa	14,257	1.1
Sibanye Stillwater	South Africa	10,255	0.8
		—————	—————
		39,694	3.1
		=========	=========
Iron Ore
Labrador Iron	Canada	27,768	2.2
Deterra Royalties	Australasia	4,650	0.4
Fortescue Metals Group	Australasia	2,576	0.2
Equatorial Resources	Other Africa	306	–
Champion Iron	Canada	112	–
		—————	—————
		35,412	2.8
		=========	=========
Nickel
Nickel Mines	Indonesia	17,679	1.4
Bindura Nickel	Other Africa	128	–
		—————	—————
		17,807	1.4
		=========	=========
Zinc
Titan Mining+#	United States	2,520	0.2
		—————	—————
		2,520	0.2
		=========	=========
		1,256,134	100.0
		=========	=========
Comprising
– Investments		1,256,801	100.1
– Options		(667)	(0.1)
		—————	—————
		1,256,134	100.0
		=========	=========

^*     Includes fixed income securities.

^#     Includes investments held at Directors’ valuation.

^~     Mining royalty contract.

^{^}     The investment in the Vale debenture is illiquid and has been valued using secondary market pricing information provided by the Brazilian Financial and Capital Markets Association (ANBIMA).

All investments are in equity shares unless otherwise stated. The total number of investments as at 31 December 2021 (including options classified as liabilities on the balance sheet) was 56 (31 December 2020: 56).

As at 31 December 2021 the Company did not hold any equity interests in companies comprising more than 3% of a company’s share capital.

PORTFOLIO ANALYSIS AS AT 31 DECEMBER 2021

COMMODITY EXPOSURE¹

	2021 portfolio	2020# portfolio	2021 Reference Index*
Diversified	39.5%	37.2%	34.3%
Copper	21.5%	19.2%	11.1%
Gold	16.4%	24.3%	21.7%
Steel	7.7%	3.4%	18.6%
Industrial Minerals	4.1%	1.8%	1.0%
Aluminium	3.3%	0.1%	3.5%
Platinum Group Metals	3.1%	4.7%	3.0%
Iron Ore	2.8%	6.0%	3.0%
Nickel	1.4%	2.7%	1.9%
Zinc	0.2%	0.3%	0.4%
Silver & Diamonds	0.0%	0.3%	1.1%
Other&	0.0%	0.0%	0.4%

¹     Based on index classifications.

^#     Represents exposure at 31 December 2020.

^*     MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (net total return).

^&     Represents a very small exposure.

GEOGRAPHIC EXPOSURE¹

	2021
Global	69.9%
Latin America	8.0%
Other2	7.4%
Australasia	6.3%
South Africa	3.1%
Other Africa (ex South Africa)	3.1%
Canada	2.2%

	2020
Global	64.9%
Australasia	9.4%
Latin America	7.3%
Other3	6.5%
South Africa	5.2%
Canada	5.1%
Other Africa (ex South Africa)	1.6%

¹     Based on the principal commodity exposure and place of operation of each investment.

²     Consists of Indonesia, Russia and United States.

³      Consists of Indonesia, Russia, United Kingdom and United States.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm