CORRECTED-UPDATE 1-Noble, TPG back ex-Xstrata boss's new mining venture

Mon Sep 30, 2013 5:11am EDT

(Corrects former finance director's surname in paragraph 7)

LONDON, Sept 30 (Reuters) - Trading house Noble and private equity group TPG have each invested $500 million in a private mining venture led by Mick Davis, the former head of Xstrata, hoping to cash in on low valuations and a dearth of buyers for mining assets.

Davis set up his new venture, named in a statement on Monday as X2 Resources, earlier this year, after he was ousted from Xstrata following the miner's acquisition by trading giant Glencore, its largest shareholder.

Under the original takeover deal, Davis had been due to be chief executive of the combined Glencore Xstrata group, but a dispute over executive pay and an eventual improvement of Glencore's offer meant the end for the South African boss after a more than a decade at the helm of Xstrata.

After that abrupt exit, Davis, known as a dealmaker, moved swiftly, using Xstrata's former offices to set up what he and his investors hope will become a second Xstrata - a diversified miner he is credited with building into one of the world's largest, up from a $500 million collection of zinc and ferrochrome assets.

Davis is one of a number of mining bosses ousted in a wave of change in the sector over the past 12 months, as prices cooled, boom-year deals soured and investors began to demand austerity. Many of them, like Davis, have remained in the industry with private investment companies - hoping to cash in as major miners shed unwanted assets and few queue up to buy.

In a statement on Monday, the companies said X2 Resources planned to create a "mid-tier diversified miner and metals group", whose output would eventually be marketed by Noble, a rival of Glencore's.

The statement said Davis' team, which also includes former Xstrata finance director and long-time boss Trevor Reid, was in discussion with "a further select group" of potential investors.

Goldman Sachs acted as financial adviser to X2. (Reporting by Clara Ferreira-Marques; Editing by Tom Bill and Louise Heavens)

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