Mick Davis, the founder and former chief executive of Xstrata, has raised $1 billion (£619 million) in the first stage of his plans to create yet another mining giant.
Davis, who quit when Xstrata was taken over by Glencore for $46 billion in May, said that he plans to build a “mid-tier diversified mining and metals group” — almost exactly the same phrase he used when starting Xstrata a decade ago.
X2 Resources is being assembled in Xstrata’s former St James’s headquarters, which Davis — widely known as Mick the Miner— was allowed to keep on for 12 months after the takeover. His team includes former Xstrata finance director Trevor Reid and four other former executives of the company.
Sources could not say how much money the management team might put into X2 or what equity stake they would end up with. Davis walked away from the Glencore deal with just over £15 million and Reid with £5.5 million. Both would have received far bigger rewards had Glencore shareholders not opposed a controversial £140 million retention package for roughly 70 senior managers.
The first round of financing sees Hong Kong-based Noble Group, a commodities distributor and trader, and private equity firm TPG each investing $500 million in X2 Resources.
Noble will be X2’s preferred marketer and provider of supply-chain management and logistics. Davis said: “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 able to capture this value.”
