Mick Davis Wants Vale’s Nickel Assets, Might Have to Up His Bid

Mick Davis, who built Xstrata Plc into one of the world’s biggest mining companies, is trying to do it again.

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Davis, a 56-year-old South African, is considering a bid for the nickel business of Vale SA, the world’s top producer, according to people with knowledge of the situation. Davis’s investment vehicle X2 Resources values Vale’s nickel business at $5 billion to $7 billion, said two of the people, who asked Bloomberg Businessweek not to be identified because the negotiations are private.

Through a decade of 40 mergers and expansions, the onetime cricket umpire Davis increased Xstrata’s market value more than 80 times to $50 billion, and became the world’s biggest exporter of power-station coal. After it agreed to be acquired in 2012 by its largest shareholder Glencore International Plc in a $30 billion deal, Davis was to lead the combined company. The power-sharing agreement collapsed when Glencore Chief Executive Officer Ivan Glasenberg demanded the title.

The cash price of primary Indian nickel fell 2.5% on Friday, January 23 to INR 910.30 ($14.80) per kilogram, making it the day’s biggest mover. The 3-month price of nickel closed at $14,750 per metric ton. Following a couple days of improvement, the metal’s price weakened by 0.7% on the LME. The spot price of nickel declined 0.3% on the LME to $14,715 per metric ton, after two days of improvement.

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Chinese stainless steel closed mixed last Friday. The price of Chinese ferro-chrome held steady at CNY 10,950 ($1,764) per metric ton. For the fifth day in a row, the price of Chinese ferro-moly remained essentially flat at CNY 87,000 ($14,017) per metric ton.

Following a couple days of improvement, the price of Chinese primary nickel weakened by 1.9%. Prices closed at CNY 108,200 ($17,433) per metric ton. The Allegheny Ludlum 316 stainless surcharge saw essentially no change for the fifth day in a row, remaining around $1.01 per pound. The price of Chinese 316 stainless coil was unchanged at CNY 23,700 ($3,818) per metric ton. The price of Chinese 304 stainless coil continues hovering around CNY 16,700 ($2,691) per metric ton for the fifth day in a row. For the fifth consecutive day, the price of Chinese 316 stainless steel scrap held flat at CNY 12,950 ($2,086) per metric ton.

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