Ex-Xstrata boss wants BHP’s thermal coal portfolio

Former Xstrata boss Mick Davis is said to be in discussions with BHP Billiton in a bid to buy the company’s unwanted coal assets.

According to The Sunday Times, Davis wants to buy a large portion of BHP’s thermal coal assets in move analysts say will seek to reverse the merger that created BHP 13 years ago.

Davis stepped down from Xstrata following a $44 billion Glencore takeover in last May and will be looking to emulate his success there at his newly created company X2 Resources.

Davis led a management team at Xstrata that turned the $500 million-market-value coal producer into a $50 billion major through ten years of mergers and acquisitions.

The X2 team is made up of a raft of ex-Xstrata executives including former finance director Trevor Reid.

Earlier this year X2 announced it had raised US$3.75 billion from investors in a bid to buy mining assets.

Sunday Time reports Davis has approached JPMorgan to borrow up to $US8bn more.

It is thought an offer has been made for BHP’s thermal coal division amidst falling prices and a still too high Australian dollar.

There is also speculation Davis could be eyeing BHP’s aluminium, nickel and manganese operations also, , reportedly worth close to $US15bn.

Davis has previously said it was an opportune time to focus on starting acquisition discussions.

"We have attracted a very prestigious core group of large scale, high quality investors who share our vision of building a new mining group with the potential to generate attractive returns through the cycle. We believe the timing for this venture remains very opportune and we will now focus increased attention on starting the investment process,” he said.

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