X2 resources could acquire Rio Tinto’s coal assets

Reports have emerged that former boss of Xstrata, Mick Davies, is in talks with Rio Tinto about the acquisition of a number of coal assets.

According to the Financial Times, sources close to the matter said discussions between Davies’ new mining company X2 Resources and Rio were serious, but in the early stages.

The source said the talks included both the sale of Rio’s thermal coal assets in NSW, as well as the company’s metallurgical coal assets in QLD.

Davis has raised $US5.6 billion from investors in a bid to buy mining assets and launch X2 Resources as a mid-level diversified resource company.

Davis stepped down from Xstrata following a $44 billion Glencore takeover in May 2013 and will be looking to emulate his success there.

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.

Reports emerged last year that Davies was after assets in BHP Billiton’s thermal coal portfolio, while earlier this year it was said X2 Resources could make a play for Vale’s nickel business.