Davis’s new outfit likes a bit of a challenge
● Mick Davis, the former boss of Xstrata, has joined forces with a former diamond industry executive and Swiss-based fund manager to set up a new company targeting troubled mining assets.
Niron Metals was incorporated in June and lists Davis as one of three directors, along with Varda Shine, who ran trading at De Beers for eight years, and Marcos Camhis, founder of Fos Asset Management, according to filings at UK Companies House.
Camhis owns a stake in Falcondo, a previously mothballed nickel mine in the Dominican Republic that Glencore inherited from its takeover of Xstrata and sold in 2015.
Unlike his previous mining investment venture X2 Resources, Davis is not looking to raise a multibillion-dollar war chest for Niron and make large acquisitions, according to people familiar with his thinking.
Instead, Niron will be used to explore possible investments in smaller assets that have been shunned by other investors either because they are in difficult jurisdictions or face other labour, government or regulatory challenges.
Davis is one of the most widely recognised names in the mining industry, having
Niron will explore smaller assets that have been shunned by other investors
run Xstrata until it was bought by Glencore in 2013 in a bitterly contested deal.
Before that, he served as chief financial officer of Billiton, the mining company that in 2001 merged with BHP to form the world’s largest natural resources group by market capitalisation.
In late 2017, Davis briefly emerged as a potential chair of Rio Tinto before a backlash by investors quashed his chances.
The SA-born businessman recently joined the board of Arq, a coal start-up backed by oil trader Vitol, and has been appointed by President Cyril Ramaphosa to a task force charged with trying to resolve the problems at Eskom.
Davis, who was knighted in 2015, is treasurer of the UK’s governing Conservative Party.
X2 Resources was quietly wound up in 2016 after Davis was not able to find an acquisition that its backers, which included large North American pension funds with strong environmental investment mandates, would accept.
It came close to buying a group of coal mines from Rio, only for the deal to fall apart on environmental grounds.
Davis also approached BHP with an offer to buy a collection of its noncore mines, but the Anglo-Australian company decided to stick with a plan to spin off the noncore assets into a newly listed company called South32. — © The Financial Times