Finweek English Edition - - COMPANIES & INVESTMENTS -

The savvy min­ing ex­ec­u­tives, in­clud­ing those kicked off their perches when the min­ing mar­ket sud­denly turned about a year ago, have taken up the guise of pri­vate eq­uity to take ad­van­tage of the process. Buy­ing cheaply at the bot­tom of the mar­ket and wait­ing for the up-cy­cle to be­gin again is the name of the game.

“Pri­vate eq­uity has never been keen on min­ing re­sources in the past ow­ing to the cycli­cal­ity of the mar­ket,” said head of Mac­quarie Re­search’s min­ing re­search in SA, Kieron Daly. “But there have been a num­ber of for­mer min­ing CEOs pop­ping up run­ning them such that Mick is likely to have de­cent com­pe­ti­tion for th­ese as­sets,” he says.

Leigh Clif­ford, a for­mer CEO of Rio Tinto is ad­vi­sor to pri­vate eq­uity f irm KKR & Com­pany which was con­sid­er­ing bid­ding for the $1bn Aus­tralian cop­per mine North­parkes, also the tar­get of an­other pri­vate eq­uity in­vestor, Car­lyle Group. There’s even talk t hat Tom Al­banese, the for­mer CEO of Rio Tinto, is con­sid­er­ing pri­vate eq­uity.

Of course, go­ing pri­vate for min­ing bosses is not ex­actly the new­est idea in the world. There’s a form of it in for­mer Im­pala Plat­inum CEO Keith Rum­ble’s Sun Min­ing which aimed at f in­d­ing as­sets in In­dia and Rus­sia while Aaron Re­gent, f ired as CEO of Bar­rick Gold in 2012, es­tab­lished Ma­gris Re­sources, which aimed at as­sets in the Amer­i­cas.

This is not to speak much of bankers who spe­cialised in min­ing also tak­ing to pri­vate eq­uity such as SAS vet­eran, Ian Ham­man, dubbed the king of M& A re­sources while at JP Mor­gan Cazen­ove and now a mem­ber of his own start-up, start- up, Strand Part­ners. An­other JP Mor­gan star, Lloyd Pengilly, who helped drive t he Glen­core Xs­trata deal that even­tu­ally put pay to Davis’s fu­ture

there, is es­tab­lish­ing

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Mick Davis

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