IGO to record impairment against nickel assets in strategy shift
IGO has been undertaking a strategic review in an attempt to revaluate its resources.
Former Xstrata boss Mick Davis’ new company held talks with BHP Billiton (ASX:BHP) earlier this year to buy its unloved operations, in an ambitious deal that would have broken up the world’s biggest miner, FT.com sources confirmed.
But BHP rejected the offer from X2 Resources, Davis’ investment vehicle, and instead went ahead with its plans to spin-off unwanted assets into a new listed company, the paper adds.
It is unclear whether Davis bid for all the assets that BHP ended up including in the new firm, but news emerged in April that he wanted the mining giant’s coal division to be cornerstone of his new resource empire.
“Mick The Miner”, as he is known in the industry, has already built a war chest of over $4.5 billion. The team behind X2, which also involves former Xstrata finance director Trevor Reid, believe they could profit from picking up assets other companies, under financial strain of getting funds for ongoing projects, are forced to sell at very low price.
Davis, 56, built his career on this “stronger-for-longer” theory, based on the belief that urbanization in China, India and some parts of sub-Saharan African would send the prices soaring for the copper used in everything from plumbing to the coal burned in electricity plants.
He is one of the many former chiefs of mining companies who have recently launched investment vehicles.
Ex-Barrick Gold (TSX, NYSE: ABX) boss, Aaron Regent, is another one who has grab headlines this month as he struck his first deal last week, spending $500 million in a niobium mine and rare earth deposit from Canadian miner Iamgold Corp. (TSX: IMG) (NYSE:IAG).
Image: Screenshot via YouTube.
