LONDON, March 31 (Reuters) – More than a year after he launched his private fund, former Xstrata boss Mick Davis is coming under pressure to build a new mining empire with the $6 billion in capital he has raised.
The renowned dealmaker set up X2 Resources 18 months ago after Glencore’s $46 billion takeover of Xstrata, when he was passed over for the top job in favour of his Glencore counterpart, Ivan Glasenberg.
Davis has since approached most large mining companies looking to buy a variety of assets, banking and industry sources said, but nobody has agreed to sell given a feeling that current prices are at rock bottom and may turn up again before long.
“Mick’s team has been looking at so many assets closely. But nobody wanted to sell to them. Vale didn’t want to sell, Rio didn’t want to sell, BHP didn’t want to sell,” said an industry source close to Davis. With his portfolio still empty, some sources expressed concern that some investors’ patience with Davis may run thin.
A banking source said: “Not all those investors are stuck on mining. So they say: if we can’t spend on this, we’ll go buy a bank or a supermarket.”
“I think Mick is feeling the pressure to do something, but the sector is as cheap as it gets.”
The PR company representing X2 declined to comment and did not make Davis available for comment.
Davis has gathered $5.6 billion backing from investors -including private equity group TPG Capital, commodities trader Noble Group and sovereign wealth and pension funds – who have been drawn by his reputation.
The former Eskom, Gencor and Billiton executive first set about building his own empire in 2002, when Xstrata first listed, and acquired a collection of coal assets from giant commodity trader Glencore.
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