Mick Davis, the former Xstrata chief executive who lost out when his company was taken over by Glencore International, is trying for a comeback.
Trading house Noble Group and US private equity firm TPG Capital will each invest US$500 million ($537 million) in a private mining venture led by Davis, according to a statement on Monday. The business, called X2 Resources, is intended to create a mid-tier metals and mining company.
Mr Davis is credited with expanding Xstrata from a small collection of mining assets into one of the world's largest mining groups. He was ousted as chief executive this year after the company's takeover by its largest shareholder, Glencore, the commodity trading house based in Switzerland that was founded in 1974 by Marc Rich.
Mr Davis was supposed to become chief executive of the combined company, now known as Glencore Xstrata, but after a revised takeover offer, Glencore's chief, Ivan Glasenberg, took the post.
The name X2 appears to be a not-so-subtle suggestion that the new venture is an effort to replicate Mr Davis' success at Xstrata. Whether a similar opportunity exists today in mining is open to question. In his former role, Mr Davis was able to cash in on the huge rise in the price of iron ore, copper and other commodities earlier in the century that was generated by a building and industrial boom in China and other emerging markets.
"He was the most bullish of CEOs in the biggest bull cycle we have ever seen," said Paul Gait, a mining analyst with Bernstein Research in London. "We are not going to see that kind of structural change again."
After the boom years, the mining industry has been rocked by slower demand and cooling prices. Deals concluded at high prices no longer look smart, and most of the chief executives of large mining companies have lost their jobs. Mr Glasenberg, who is more trader than miner, is one of the few left.
Mr Gait said he believed X2 could profit from picking up assets as other mining companies, under pressure to raise money to finance continuing projects, are forced to sell cheaply in a downturn.
But X2 may need more capital than it has now. Even after the boom, good mining assets tend to cost several billion dollars, possibly putting them out of X2's reach. X2's statement says it is "in discussions with a further select group of potential investors".