Mining Fund X2 Resources Loses Two Large Investors; Looks to Restructure – by Ben Dummett and Sarah McFarlane (Wall Street Journal – July 15, 2016)

Once hailed as leader of a new wave of investment into mining

X2 Resources, the massive fund once hailed as the leader of a new wave of investment into the beleaguered mining industry, is restructuring after losing two key investors and failing to execute any deals, according to people familiar with the matter.

Launched in 2013 by Mick Davis, the former chief executive of miner Xstrata PLC, the fund won commitments of $5.6 billion on the promise of picking up bargains as the commodities’ bust forced fire sales.

X2 Resources was one of several private-equity style funds founded by high profile former mining executives and bankers that were trumpeted in the media and industry as a key source of funding for a sector that investors were fleeing. But none of these funds have made significant investments.

The fire sale didn’t happen, and for X2, its structure, in which some key investors had a veto on proposed investments, meant that it was particularly hard to get deals done.

Now, Noble Group, the commodities trade house, has pulled its $500 million commitment and U.S. private-equity firm TPG won’t renew its equivalent commitment when it expires in the first quarter of 2017, people familiar with the matter said.

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