FORMER Xstrata boss Mick Davis has raised an initial US$1 billion to kick-start an ambitious private mining venture, X2 Resources.
X2 is the brainchild of Mr Davis and a team of ex-Xstrata executives looking to create a new mid-tier diversified mining and metals group by “identifying and acquiring assets and businesses at an opportune time in the cycle.”
The venture’s strategic partners, commodities trading house Noble Group and private equity firm TPG, have agreed to invest US$500 million each.
X2 announced Noble as the company’s preferred marketer and provider of supply chain management and logistics services, a partnership that would bring “significant advantages” including market intelligence, proprietary deal flow, acquisition support and post-acquisition services such as supply chain and risk management.
TPG, which boasts more than US$55.3 billion of assets under management and investment across the globe, would bring extensive international investment experience and resources, deal flow and access to investors.
Mr Davis said it was an opportune time for X2 to create significant value in the mining and metals industry.
“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,” he said.
Noble chief executive Yusuf Alireza said the partnership was consistent with the company’s strategy of focussing on supply chain management, rather than producing natural resources.
“The X2 team has an impressive track record of building metals and mining platforms around the world,” TPG founding partner Jim Coulter said.
“We look forward to deploying TPG’s global network and experience to help build this new venture with such an extraordinary team.”
X2 Partners is also in talks with an additional select group of potential investors.
Mr Davis lost his role as head of Glencore Xstrata shortly after the Glencore takeover earlier this year.
His current team, which includes former Xstrata chief financial officer Trevor Reid and strategist Thras Moraitis, was instrumental in building Xstrata from a market capitalisation of $500 million to $54 billion in about a decade, according to Business Day.
There is speculation that X2 had considered buying the Las Bambas copper project in Peru – which Glencore Xstrata has to sell as a condition of the merger – and non-core Rio Tinto and Anglo American assets.