Mick the miner raises $3.75bn for new deals

 
Michael Bow
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THE FORMER boss of mining giant Xstrata is back on the acquisition trial after raising up to $3.75bn (£2.25bn) from five institutional investors.

Mick Davis, dubbed Mick the Miner for his successful mining exploits, has raised the money through his X2 Resources company vehicle, which will use the money to invest in various metal and mining assets around the world.

US private equity giant TPG Capital and minerals group Noble Group have been revealed as two of the investors, with a further three investors made up of large institutional pension funds and sovereign wealth funds.

“We have attracted a very prestigious core group of large scale, high quality investors who share our vision of building a new mining group with the potential to generate attractive returns through the cycle,” Davis said.

We believe the timing for this venture remains very opportune and we will now focus increased attention on starting the investment process.”

Each of the five has put up $500m for the fund with an extra $1.25bn on offer from the five to help fund future projects.

Davis is now understood to be on the lookout for more investors to come on board with the company, which is on course to grow to a mid-tier mining player.

Davis was chief executive of Xstrata before its $29bn takeover by commodity trading giant Glencore.

He has joined forces with Xstrata’s former chief financial officer Trevor Reid at X2, which is based in London.

The business will be run as a hybrid-type company which takes its cue from the private equity funding model, where investors give cash over to firms for long periods and the money is used to buy assets.

It will look to invest in mines that are already operational rather than go into the riskier strategy of exploration mining.

TPG, originally Texas Pacific Group, is led by private equity veteran David Bonderman, who is the chairman of airline Ryanair.

BEHIND THE DEAL
GOLDMAN SACHS | BRETT OLSHER

1 Olsher sits on an advisory board for Columbia University’s school of international and public affairs.

2 Before his career in investment banking he ran his own company, Olsher Metals Corporation, which was a commodities trading and distribution house.

3 Before joining Goldman as partner he worked for Deutsche Bank for nine years between 2001 and 2010. He previously worked with Mick Davis on deals at Xstrata.

Also advising...
Goldman acted as placing agent on the deal and joining Olsher from Goldman Sachs were Christos Tomaras and Stephen Withnell. Tomaras is a managing director working in European financial sponsor mergers and acquisition while Withnell is also a managing director. Aura Financial offered PR advice.

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