15th Apr 2014 10:27
LONDON (Alliance News) - Baker Steel Resources Trust Ltd Tuesday said that it had underperformed the Euromoney Mining Index in 2013 as its largest investment dropped in value.
The closed-ended investment trust saw its net asset value per share fall 43.2% during year to 62.0 pence from 109.1 pence, primarily hit by the 62.6% decline in the value of its largest investment, Ivanhoe Mines Ltd, despite making good progress on its main projects.
The Euromoney Mining 100 Index fell 25.7% during the year, and the FTSE Gold Mines Index fell 54.1% in sterling terms.
The trust highlighted issues of countries looking to get more royalties from resources through direct stakes, and the desire of governments in emerging markets to have a greater share of the refining process to promote local skills and jobs. The trust said that whilst this was viable in the long term, "factors such as size and quality of deposits as well as available infrastructure, can make local dedicated smelting and refining uneconomic."
The trust said this could sterilise certain projects, and is an issue it will need to take into account for further investments in emerging markets.
Shares in Baker Steel were trading down 3.4% at 39.61 pence Tuesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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