THE MINING YEARBOOK 2021
MICK DAVIS RETURNS WITH A PLAN TO SPEND WHERE MINING GIANTS WON’T (OR CAN’T) BY DAVID MCKAY
Mick Davis is back in the headlines as chairman of Vision Blue Resources, an investment company seeking out positions in early-stage battery minerals projects.
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M
ick Davis has had a singular career. Firstly, there’s the knighthood, awarded in 2015 for his efforts in Holocaust commemoration and education. Then there’s the threeyear stint as treasurer and then CEO of the UK’s Conservative Party, under the leadership of then prime minister, Theresa May. But for the most part it, is as a mining tycoon - ‘Mick the Miner’ - as the City once dubbed him, that Davis is renowned. The last three years have been among his quietest following the 2017 closure of X2 Resources, the $6bn privately backed fund. This year, however, marks his return as chairman of Vision Blue Resources (VBR), a company initially backed by $60m in private funds. Davis says VBR is not like his other mining ventures. “I’m not building a mining company; I’m essentially investing in opportunities where I think value can be created. I’m adding combinations of my financial capital and my human capital to ensure these projects and opportunities can track up the value curve. That’s why Vision Blue is different to the rest, and that’s essentially what we’re trying to look at.” ‘The rest’ refers to Davis’s previous roles, firstly as the CFO of Billiton, the South African company that merged with BHP to create the world’s largest mining company, and then subsequent roles as founding CEO of Xstrata, and X2 Resources. The way Davis sees it, Billiton represented the emergence of a newly democratised South Africa on the international mining stage, while Xstrata was driven by the surge in demand for commodities as a result of growing urbanisation in China. X2 Resources, which Davis started after Xstrata’s merger with Glencore, also sought to capitalise on China’s commodities boom, recognising in a debt-burdened mining sector the chance to buy projects cheaply. VBR is a different animal, says Davis. Its initial investment - in a graphite project in Madagascar through a $29.5m stake in NextSource Materials - is aimed at supplying the electric vehicle market, which Davis believes is part of a new, potentially multi-generational phase in elevated commodities demand. What appears unique about decarbonisation is it has widespread, almost global, political sanction. “Here we’re seeing the key driver being the transition to green energy and the almost globally mandated reduction of CO2, and that is leading to a new secular shift in demand,” he says. According to Davis, this is not a secular shift created by a country industrialising like China, or massive growth in GDP, but as a result of “... mandated political structural change in the way that economies function”. Davis thinks demand for minerals such as graphite, which is processed for use in the lithium-ion batteries needed to power electric vehicles, will be profound, easily outpacing in duration and impact the China-led super-cycle of 2002 to 2019. The investment in the Madagascar mine has been followed by a $300m capital-raising after VBR teamed up with the New York-listed SPAC ESM Acquisition Company. The SPAC’s mandate is to hunt for green energy investments. Separately, VBR has invested $12.6m in FerroAlloy Resources Group with a view to expanding a vanadium project in Kazakhstan. Previously a steel-strengthening agent, vanadium is now being used in new ways, including for large-scale power storage. VBR’s quick-fire investments compare favourably with the stationary nature of X2 Resources, where Davis’s financial backers declined to sign off on at least three deals. He describes this situation
