Former Xstrata head Mick Davis back with new mining venture

30 Sep 2013


Former head of diversified miner Xstrata Mick Davis is making a comeback by starting a new metals and mining company called  X2 Resources with the backing of Singapore-listed raw-materials trader Noble Group and US private-equity firm TPG Capital.

X2 Resources, founded by Davis and former Xstrata CFO Trevor Reid, will receive an investment of $500 million each from Noble and TPG Capital.

London-based X2 is also in discussions with ''a further select group of potential investors,'' the company  said in a statement.

Noble will be X2 Resources' preferred marketer and provider of supply chain management and logistics services, while TPG Capital will bring deals and access to investors.

"We are pleased that Noble and TPG share our enthusiasm for this enterprise to create significant value in the mining and metals industry at this opportune time. The combination of the X2 Partners team's multi-decade industry experience with Noble's and TPG's strongly complementary capabilities will ensure X2 Resources is distinctively able to capture this value," said Davis.

Yusuf Alireza, CEO of Noble, said, "Noble's partnership with X2 and TPG brings together the complementary skill sets of the X2 team's unparalleled experience in building major diversified mining companies with our expertise as a global supply chain manager and TPG's global investment franchise. The investment is consistent with our previously communicated strategy of focusing primarily on our core competence as a supply chain manager rather than a producer of natural resources."

Davis, a former cricket umpire and architect of BHP and Billiton merger when he was the CFO of  Billiton, was ousted from Xstrata earlier this year after the company was acquired by commodities trader Glencore International.

Davis is credited with expanding Xstrata from the 2002 acquisition of Glencore's coal assets in Australia and South Africa to into the world's fifth-largest mining company with operations in 20 countries through a series of aggressive acquisitions.

Davis was appointed by Xstrata as CEO in 2001 soon after the merger of BHP Billiton. When he joined the company in October 2001, Xstrata was a small Switzerland-listed mining company with a market capitalisation of around $500 million and largely reliant on ferro-alloys and zinc operations in South Africa and Europe.

By the time he left, the company's market capitalisation was around $26.8 billion and was the world's largest exporter of thermal coal, the largest producer of ferrochrome, one of the top five producers of coking or metallurgical coal, the fourth largest global copper producers, the fifth largest global nickel producers and one of the world's largest miners and producers of zinc.

Davis made deals worth more than $30 billion, adding copper, nickel and zinc to the company's portfolio. His largest acquisition was the 2006 purchase of Canadian nickel producer Falconbridge for $18.1 billion, while his biggest failure was the bombed $68 billion merger of equals with London-based Anglo American in October 2009.

He also had to see his $10-billion unsolicited offer for London-based Lonmin Plc, the world's third-biggest platinum producer, rejected in 2008.


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