Mick Davis' X2 Said to Consider Bid for Anglo Mines in Brazil

  • Anglo American said to expect to receive bids next week
  • Company is selling niobium and phosphate mines for $1 billion

X2 Resources, the private-equity firm founded by former Xstrata Ltd. chief Mick Davis, is among companies considering a bid for Anglo American Plc’s Brazilian niobium and phosphate mines, said two people with knowledge of the matter.

Anglo hired Goldman Sachs Group Inc. and Morgan Stanley to sell the assets as a package valued at $1 billion, and is expecting to receive bids next week, the people said, asking not to be identified because discussions are private.

Anglo American, X2, Goldman Sachs and Morgan Stanley declined to comment.

London-based Anglo is looking to raise another $4 billion from asset sales to cope with a collapse in commodity prices, after generating about $2 billion by offloading its tarmac business, two copper mines in Chile and platinum assets in South Africa. South32 Ltd., the aluminum, coal and manganese producer spun out of BHP Billiton Ltd. last year, is also considering a bid, three people familiar with the situation said last month. 

Weighed down by debt and with too many mines that don’t make money, Anglo was the worst performer in the U.K.’s FTSE 100 Index last year. Even after rallying 31 percent last week as commodities prices picked up, the company’s market value is still down at $6.1 billion, compared with net debt of $12 billion, according to data compiled by Bloomberg.

Under Chief Executive Officer Mark Cutifani’s turnaround plan, Anglo will be centered around its dozen or so most lucrative assets: they include diamonds, through its De Beers unit, copper and platinum. Cutifani, 57, told a conference this week that 2016 is looking like the “most challenging yet” for the industry.

Davis founded X2 in 2013 with other former executives of the miner acquired by Glencore Plc earlier that year. He raised about $5 billion from backers including Noble Group, private-equity fund TPG Capital and other sovereign-wealth and pension-fund investors in 2014. So far, Davis hasn’t deployed any capital.

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