Mining Magnate Mick Davis Is Back

(Bloomberg) -- Almost every major player in mining has tried to build an iron ore mine in Guinea. Now it’s the turn of Mick Davis.

Davis, nicknamed Mick the Miner, had been one of mining’s most successful operators and deal makers, but in recent years has struggled to reestablish himself in the industry. Now, a remarkable make-up deal between billionaire mining tycoon Beny Steinmetz and the Guinean government has given him the chance to develop one of Africa’s richest iron ore deposits.

• Steinmetz Stages Guinea Comeback in Sarkozy-Brokered Deal

Should Guinea and Steinmetz settle their disputes, Davis, through his new Niron Metals vehicle, will be able to develop the Zogota iron ore mine. The project, where mining giant Vale SA has already spent hundreds of millions of dollars, could be developed quickly and relatively cheaply using existing rail infrastructure that runs from the nearby Liberia border to a deep water port.

“Niron believes that the Zogota deposit can be brought into production on an accelerated timetable, thereby helping to unlock the potential of Guinea’s rich resources,” Niron said.

For Davis, it offers an opportunity to relaunch his mining career that started in his native South Africa.

As Xstrata Plc’s chief executive officer, he took a debt-laden coal miner and built it into a $50 billion giant before a friendly takeover by Glencore Plc. Yet what should have been Davis’s crowning achievement soon soured. He was earmarked to be the CEO of the new combined company, but a shareholder revolt over payments he was set to receive led to his ousting and billionaire Ivan Glasenberg taking the top job instead.

Since then it has been a roller-coaster ride for Davis, who’s also the U.K. Conservative Party treasurer. His private-equity vehicle, X2 Resources, folded after failing to make any deals amid volatile commodity prices and as investors couldn’t agree on what assets to buy. In 2017, he was on the cusp of being appointed Rio Tinto Group’s chairman, before once again falling victim to an angry shareholder revolt that labeled him an unacceptable choice.

Still, while X2 failed to make any deals, it showed Davis’s ability to attract financial backers. He raised about $5 billion from investors including Noble Group Ltd., TPG Capital and other sovereign wealth and pension funds for the vehicle, and it’s unlikely he’ll struggle to raise a much more modest amount required to develop Zogota.

The mine is also unlikely to be the only target of Niron, Davis’s vehicle with Switzerland-based Fos Asset Management founder Marcos Camhis and Varda Shine, formerly of diamond giant De Beers.

Should Davis succeed in shipping iron ore from Guinea it would mark a great achievement. While the West African country is bestowed by some of the richest deposits in the world -- including the fabled Simandou -- companies from Rio Tinto to Vale have so far failed to mine in the country.

--With assistance from Franz Wild.

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Nicholas Larkin

©2019 Bloomberg L.P.