‘Big Mick’ returns to mining – and he’s hungry for acquisitions – by Eric Reguly (Globe and Mail – October 1, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

LONDON — Mick Davis is back in the mining game. Known as “Big Mick” because of his imposing size and voracious appetite for acquisitions, Mr. Davis transformed Xstrata PLC from a grab-bag of second-tier assets into a global resources powerhouse, bolstered by the takeover of Canada’s Falconbridge Ltd.

Now Mr. Davis, older, leaner but still hungry, along with a few former Xstrata executives, has launched X2 Resources, a private company that has raised $1-billion (U.S.) and plans to raise more. The goal is to give it the firepower to pounce on mining assets that the X2 executives consider undervalued in a market that has lost its love for commodities.

In interview in London, Mr. Davis, 55, and Trevor Reid, 52, who was Xstrata’s finance director, said they are talking to Canadian investors, among others. “We’re still in the fundraising mode and we’d like some more investors,” Mr. Reid said, adding that Canadian names are on the potential investor list.

Noble Group Ltd. and TPG are each contributing $500-million to X2, with an undisclosed amount from Mr. Davis and his colleagues.

Noble, based in Hong Kong and listed on the Singapore exchange, is one of the world’s largest commodities trading, transportation and infrastructure companies and competes with Switzerland’s Glencore, Xstrata’s new owner. Noble will market the commodities produced by X2 and provide supply management.

TPG is a U.S. private investment firm with $55.3-billion of assets under management. Its portfolio includes hundreds of businesses, ranging from biotechnology to energy.

Mr. Davis is bullish on commodities and thinks the selloff that sent mining company values plummeting is overdone, although he does not see a return to the “explosive” demand that turned mining companies such as Xstrata into some of the biggest wealth generators of the pre-2008 era. “We still have a lot of conviction about the resources industry,” he said. “We’re seeing ongoing demand in the developing world and the rise of consumer markets there.”

For the rest of his article, click here: http://www.theglobeandmail.com/report-on-business/big-mick-returns-to-mining-and-hes-hungry-for-acquisitions/article14618781/?cmpid=rss1

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