Coal news and updates

Mining veteran and former Xstrata head Mick Davis has offered to buy BHP Billiton's thermal coal division, which could form the core of his X2 Resources, the Sunday Times said.

 

Davis, who led Xstrata until its merger with Glencore last year, had already been named by Australian media as a contender for BHP's Nickel West and some other businesses.

 

BHP and X2 Resources declined to comment to Reuters on the latest newspaper report on Sunday.

 

X2 Resources, which operates a mid-sized diversified mining and metals company, has up to $3.75 billion at its disposal to further plans to become a new mining conglomerate. Its backers comprise private equity group TPG Capital, commodities trader Noble Group and three unnamed sovereign wealth and pension fund investors.

 

The Sunday Times said Davis had recently appointed JPMorgan to provide up to $8 billion in debt to top up his new company's war chest.

 

In addition to offering to buy the thermal coal business - which has struggled in the face of falling coal prices - and weighing an offer for nickel, Davis is also thought to be considering sweeping up BHP's aluminium and manganese operations, the paper added.

 

Davis knows BHP Billiton well, having been finance director before it merged with BHP in 2001. The assets in question were the core of his old company, though they account for only a small part of BHP's overall operations. 

 

 

Source: Reuters