(Alliance News) - BlackRock World Mining Trust PLC on Thursday said that the transition to a low carbon economy is set to increase demand for materials such as lithium, as it reported a decline in net asset value.
The investor in mining and metal assets said net asset value per share fell 12% to 606.78 pence as at December 31, from 688.35p a year prior.
NAV per share total return in 2023 was negative 6.2%, swung from positive 17.7% a year prior and underperforming against its reference index, the MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (net total return), which had a total return of positive 2.4%.
Chair David Cheyne said: "Higher interest rates and greater volatility have resulted in a high level of uncertainty for markets and a remarkable dispersion in commodity price returns during 2023. There has also been a challenging geopolitical backdrop with little end in sight for the conflicts in both Eastern Europe and the Middle East, as well as structural competition between US and China. The number of volatile situations worldwide is the highest in decades and 2024 is set to be the biggest election year, with more than half the world's population voting."
The company declared a final dividend of 17.00p, down 28% from 23.50p a year ago. This brings the total payout to 33.50p, 16% lower than 40.00p in 2022.
Looking ahead, Chair Cheyne said: "Inflationary pressures are easing in the US and UK and inflation is expected to return towards target in 2024. Remaining Covid-19 pandemic era supply disruptions are also fading and the Chinese government has moved forward with a series of stimulus measures to turn round its ailing economy which should support commodity demand. The energy transition to a low carbon economy is also set to increase demand for materials in the supply chain for low carbon technologies, including copper, steel and lithium, which is a positive tailwind for selective parts of the mining sector."
BlackRock World Mining shares closed 3.0% higher at 517.00p each on Thursday in London.
By Tom Budszus, Alliance News slot editor
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BlackRock World Mining Trust plc (BRWM)