Coal bid sets up clash of mining heavyweights – by Neil Hume (Financial Times – July 1, 2015)

http://www.ft.com/intl/companies/mining

Ivan Glasenberg and Sir Mick Davies set to go head-to-head over the Hunter Valley

It is a tantalising prospect for deal junkies: Sir Mick Davis going head-to-head with his arch rival Ivan Glasenberg in a takeover fight.

And one that has become a possibility with news that X2 Resources, the private equity vehicle set up by Sir Mick, is in discussions with Rio Tinto about a possible bid for its Hunter Valley coal business in Australia.

There is no love lost between Sir Mick and Mr Glasenberg, two of the biggest names in the mining world. Their relationship soured three years ago when Glencore reworked its friendly merger with Xstrata into a full-blown takeover that ousted Sir Mick as chief executive.

Since then Sir Mick has come back leaner and, arguably, hungrier. He’s raised $5.6bn from investors to buy mining assets for X2, with additional debt backing from at least one leading bank. His notoriously large frame, which inspired part of his nickname, has slimmed down. But standing between Sir Mick and his first deal is the hyper-competitive man who removed him from his last job.

It is no exaggeration to say that Glencore’s executives, including Mr Glasenberg, see themselves as the natural owner of Rio’s coal business in New South Wales. After all Glencore’s collection of mines in the Hunter Valley are right next door to Rio’s, offering the prospect of significant synergies if the two businesses could be merged or brought together.

In a moribund thermal coal market, where prices have halved since 2011, that’s highly valuable.

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