Blackrock World Mining Trust, the investment trust focused on mining investments, resumed the growth story that was interrupted in 2008. The company’s net asset value grew by 34.4% in the first half of 2009, and has grown a further 15.3% since the end of June. For comparison purposes the company noted that the HSBC Global Mining Index in the first half of 2009 rose 25.3%.Despite strong growth in the value of its portfolio in 2009 the company believes that equity valuations in the commodities sector ‘still look compelling’.The company believes that recent consolidation in the mining industry had allowed the leading companies to respond more rapidly to the collapse in demand for base metals. In addition to production cuts, producers have also delayed or cancelled over $150bn of capital expenditure scheduled for 2009 and 2010, the company noted. ‘We believe this will have a positive impact on commodity prices over the next few years,’ the company’s investment manager said.‘Economic data out of China suggests further strong growth this year and commodity import data is very supportive of current metal prices. However, we continue to meet with management from our investments who report to us that outside of strong demand from China there is slight to no improvement in metals demand above and beyond restocking,’ the company said. ‘In the absence of better economic data from the Western World, we plan to keep to the fairly cautious investment style we have been running for much of this year,’ the company added.
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