[miningmx.com] – MICK Davis has burst back on to the world mining stage raising $1bn for his Xstrata re-boot X2 Resources in a transaction that sees him take on marketer and logistics firm, Noble Group, and investment firm, TPG, as ‘partners’.
Davis has made short work of his return after being ousted from the seat of leadership at GlencoreXstrata at the end of last year, a position that is now occupied by Ivan Glasenberg.
In May, it emerged that Davis had retained Goldman Sachs as an advisor, possibly with a view to establishing a private equity firm in mining. By June, there were whispers Davis had decided to name his new venture X2.
The announcement today of the capital raising for X2 Resources confirms Davis’ intention to piece together another mining group albeit one he described as “… a new, mid-tier diversified mining and metals group”.
“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,” said Davis in an announcement.
He added that the partners were talking to “… a select group of potential investors who are also seeking to benefit from opportunities in the natural resources arena by investing in X2 Resources”.
“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.
Noble Group and TPG, a private investment firm with some $55.3bn under management, will each invest $500m in X2 Resources which will now embark on buying assets at an opportune time in the cycle” that is strongly reminiscent of Xstrata’s growth from cash shell to one of the world’s largest mining groups.
Both Noble and TPG will provide Davis with additional market intelligence that will complement that of X2 Resources, a company that also has former Xstrata finance director, Trevor Reid, as a member and other former Xstrata executives.
For Noble Group, the association positions it to become X2 Resources preferred marketer and logistics partner. For X2 Resources, the link provides “proprietary deal flow, acquisition support and post‑acquisition services such as supply chain and risk management,” Davis 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,” said Yusuf Alireza, CEO of Noble Group.
“The X2 team has an impressive track record of building metals and mining platforms around the world,” said Jim Coulter, founding partner of TPG. “We look forward to deploying TPG’s global network and experience to help build this new venture with such an extraordinary team,” he said.
