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

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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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