THE inability of X2 Resources, launched three years ago by refugees from the Glencore-Xstrata merger, to conclude a single deal makes it looks as if Mick Davis has lost the necessary risk appetite to play in the mining sector. On the basis of his team’s track record, X2 raised about $6bn to make acquisitions with the goal of becoming a mid-tier mining company. At the time, there was a lot of talk about how distressed mining companies were putting up assets for sale and the sector was awash with opportunity. But since then, X2 has apparently looked at and failed to make a number of acquisitions, possibly including South32, various Anglo American assets, and some copper mines in South America. It has also racked up $18m in expenses without any return. It is well known that sellers of mining assets have unrealistic expectations and buyers want to get assets too cheaply, but that hasn’t stopped companies like Sibanye Gold and Glencore. Maybe X2’s structure made it difficult to get the go-ahead to conclude deals? The speculation is that X2 is making changes to facilitate decision-making and has already released some investors from their funding commitments. It’s hard to guess why no deal happened, but it’s also unwise to write off Sir Mick. As a mining source told The Australian: “Deals can happen very quickly”.
LIFE OF MICK
He lives in London now, a long way from his birth town of Port Elizabeth in South Africa. After getting an honours degree in commerce from Rhodes University, he rose to become an executive director of Eskom before joining Billiton plc. He was knighted in 2015 for his services to Holocaust commemoration and education.
“As you all know, I am not one to shy away from an issue.”
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