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Mining magnate Mick Davis made an initial bid for BHP Billiton Ltd.’s nickel assets in Australia, but his offer was rejected as too low, a person familiar with the matter said.
X2 Resources, Mr. Davis’ privately held company, has been looking for assets to start building itself into a medium-sized miner, and has raised up to $3.75-billion for acquisitions. It is unknown whether Mr. Davis will increase his bid.
Before X2 , Mr. Davis ran Xstrata Plc, a global mining giant. Xstrata grew by buying out its rivals, including Canadian nickel producer Falconbridge, before it was taken over by Swiss-based Glencore in 2013.
X2 , whose team helped create Xstrata, is one of many private equity firms looking for acquisitions amid the downturn in the commodity industry.
Its strategy is to acquire unwanted assets from the senior miners, which have been re-evaluating their businesses and zeroing in on core operations in order to deal with lower metals prices.
According to analysts, BHP Billiton’s nickel assets, known as Nickel West, contributed just 2.7 per cent of the miner’s overall revenue.
The Anglo-Australian miner has been trying to sell its nickel business for more than two years, another person familiar with the matter said. In May, the company announced that it was reviewing its options regarding its nickel operation, including the outright sale.
China Minmetals Corp., a state-owned miner which was part of a consortium that bought the Las Bambas copper project from Glencore for nearly $6-billion, also looked at the assets, the source said.
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