Bloomberg: Former Xstrata CEO Mulls Bid For Vale Nickel Assets

(RTTNews) - Mick Davis, the former chief executive officer of Xstrata plc is exploring a bid for the nickel business of mining giant Vale SA (VALE), Bloomberg reported Tuesday, citing people with knowledge of the situation. Brazil-based Vale is the world's top producer of the metal.

According to the Bloomberg report, Davis's investment vehicle X2 Resources values Vale's nickel business at $5 billion to $7 billion.

X2 has reportedly raised about $4.8 billion from equity investors, including private equity firm TPG Capital and Hong Kong-based raw materials trader Noble Group Ltd. However, Vale and X2 have not commenced formal talks about the assets, Bloomberg reported.

Vale said in December 2014 that it is exploring the sale of a minority stake in its metals-producing unit in an initial public offering. The unit, which is valued by Vale at up to $35 billion, includes nickel and copper.

Xstrata was acquired by commodities trader and miner Glencore Plc (GLCNF.PK, GLNCY.PK, GLEN.L) in 2013.

VALE closed Tuesday's trading at $8.50, down $0.05 or 0.58 percent on a volume of 38.25 million shares.