Portfolio Update

BLACKROCK WORLD MINING TRUST plc (LEI - LNFFPBEUZJBOSR6PW155)
All information is at 31 January 2019 and unaudited.
Performance at month end with net income reinvested
		One				Three				One	Three		Five
		Month				Months				Year	Years		Years
Net asset value		7.0%				3.7%				-3.6%	141.4%		10.5%
Share price		4.8%				4.8%				-6.3%	147.0%		1.5%
EMIX Global Mining Index (Net)		6.3%				7.0%				-0.5%	144.3%		28.0%
(Total return)
Sources: BlackRock, EMIX Global Mining Index, Datastream
At month end
Net asset value including income1:									416.51p
Net asset value capital only:									406.81p
1 Includes net revenue of 9.7p
Share price:									357.00p
Discount to NAV2:									14.3%
Total assets:									£845.7m
Net yield3:									4.4%
Net gearing:									11.5%
Ordinary shares in issue:									176,330,242
Ordinary shares held in treasury:									16,681,600
Ongoing charges4:									1.00%
2 Discount to NAV including income. 3 Based on quarterly interim dividends of 3.00p per share declared on 25 April 2018, 16 August 2018 and 8 November 2018 in respect of the year ended 31 December 2018 and a final dividend of 6.60p per share in respect of the year ended 31 December 2017. 4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2017.
Sector	% Total						Country Analysis					% Total
	Assets											Assets
Diversified	46.6						Global					60.8
Copper	19.6						Latin America					11.9
Gold	14.0						Australasia					10.3
Industrial Minerals	6.7						Canada					6.6
Silver & Diamonds	5.9						Other Africa					2.2
Aluminium	0.9						USA					1.7
Materials	0.9						South Africa					1.4
Zinc	0.7						Kazakhstan					0.7
Coal	0.7						Russia					0.5
Nickel	0.4						Indonesia					0.5
Mining	0.3						Argentina					0.2
Iron Ore	0.1						Current Assets					3.2
Current Assets	3.2											-----
	-----											100.0
	100.0											=====
	=====
Ten Largest Investments
Company				% Total Assets
BHP					11.9
Rio Tinto					9.9
Glencore					7.8
Vale					7.4
First Quantum Minerals					7.1
Teck Resources					4.5
Sociedad Minera Cerro Verde					2.8
OZ Minerals Brazil - royalty					2.4
Mountain Province Diamonds					2.4
Newmont Mining					2.3

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

Performance

The Company’s NAV increased by 7.0% in January, outperforming its reference index, the EMIX Global Mining Index (net return), which increased by 6.3%.

The mining sector started the year strongly as mined commodity prices recovered after a challenging Q4 2018. This recovery was in spite of economic data from China remaining relatively lacklustre, with the country’s manufacturing PMI coming in below 50 for the first time in 19 months. However, the direction of travel for the macro backdrop appeared positive as China announced further stimulus measures and expectations around the US interest rate path were revised down. The latter contributed towards the US dollar depreciating over the month, which acted as a tailwind for commodity prices. Bulk commodities rallied, with the iron ore (62% fe) price rising by 18.2% on the back of seasonal restocking at Chinese steel mills, as well as Vale’s announced iron ore suspension. Base metals were also up with copper, zinc and nickel prices rising by 3.4%, 8.4% and 17.0% respectively. Nickel’s strong performance appeared to reflect a short squeeze in the futures market, in response to declining LME inventories. (Commodity returns in USD.)

At the company level, the most significant news was a dam failure at the Feijão mine in Brazil, owned by diversified miner Vale. On Friday 25 January, the dam burst and, at the time of writing, reports suggest there has tragically been 150 casualties with ~200 people still missing. The company has said it is too early in its investigations to say what caused the collapse and noted the last external audit report on the dam occurred on 26 September 2018. In what was a strong month for the mining sector overall, shares in Vale ended down 5.1% (in USD terms). In the Company, our position in Vale appeared among the largest detractors as a result. Environmental, social and corporate governance considerations form an important part of our investment process, and at this stage we have not made changes to our position in the company since the incident, but are investigating the situation fully.

Elsewhere in the Company, our exposure to the copper sub-sector contributed positively to relative performance. Stock selection within copper was also positive, with positions in First Quantum, Ero Copper and OZ Minerals all among the top contributors.

Strategy and Outlook

We recognise that finding a resolution to the US/China trade war will be difficult. There appears to be bipartisan support in the US for a tough stance on China and it is unclear how the technology transfer issue can be resolved. However, our view is that the market may be overestimating the impact these trade tensions would have on global economic growth. Should we see even gradual improvements in relations between the two countries, we would expect mined commodity prices to improve. Meanwhile, our overall base case for China is that it has the tools to successfully manage a gradual slowdown and we do not anticipate a hard-landing type event.

Supply and demand is tight in most mined commodity markets today and, given the cuts in mining sector spending since 2012 (down ~66%), we expect it to remain so. Our base case is therefore, barring an economic slowdown, mined commodity prices to be stable to rising through 2019. Meanwhile, we believe the shares are pricing in a materially worse commodity price environment. We see the risk-reward opportunity in mining as attractive given the improvements in balance sheets over the last two to three years and given many of the large diversified miners are trading on free cash flow yields of above 10%.

All data points are in GBP terms unless stated otherwise.

20 February 2019

Latest information is available by typing www.blackrock.co.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.