BlackRock World Mining Trust PLC reported a 16% rise in net asset value per share for 2021, although it noted that its portfolio’s performance was more subdued in the second half due to a softening in demand, especially for iron ore in China, as well as profit taking in other commodities.
Net asset value (NAV) per share rose to 622.21 pence, from 536.34 pence in 2020, as revenue more than doubled.
“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,” said chairman David Cheyne.
“This was the standout feature of the year and has resulted in total dividends increasing by 176.3% compared to last year.”
Economic growth in China decelerated in the second half, but has since picked up.
“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,” said Cheyne.
“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.”
Since the year end and up until the close of business on March 2, 2022, the company’s NAV has jumped 20.2% and the share price has surged 28.7%.
The trust noted that geopolitical tensions remain very high following Russia's invasion of Ukraine last month.
Just 0.1% of net assets, with a value of £1.7mln, was in securities with exposure to companies whose principal activities are in Russia as of March 3, 2022, it said. BlackRock previously announced that it had suspended the purchase of all Russian securities in its active and index funds.
“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,” said Cheyne.