Davis’s new out­fit likes a bit of a chal­lenge

Sunday Times - - Business News -

● 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

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