UPDATE 1-Noble, TPG back ex-Xstrata boss's new mining venture

Reuters

(Corrects former finance director's surname in paragraph 7)

LONDON, Sept 30 (Reuters) - Trading house Noble and private equity group TPG have each invested $500 million ina private mining venture led by Mick Davis, the former head ofXstrata, hoping to cash in on low valuations and a dearth ofbuyers for mining assets.

Davis set up his new venture, named in a statement on Mondayas X2 Resources, earlier this year, after he was ousted fromXstrata following the miner's acquisition by trading giantGlencore, its largest shareholder.

Under the original takeover deal, Davis had been due to bechief executive of the combined Glencore Xstrata group, but adispute over executive pay and an eventual improvement ofGlencore's offer meant the end for the South African boss aftera more than a decade at the helm of Xstrata.

After that abrupt exit, Davis, known as a dealmaker, movedswiftly, using Xstrata's former offices to set up what he andhis investors hope will become a second Xstrata - a diversifiedminer he is credited with building into one of the world'slargest, up from a $500 million collection of zinc andferrochrome assets.

Davis is one of a number of mining bosses ousted in a waveof change in the sector over the past 12 months, as pricescooled, boom-year deals soured and investors began to demandausterity. Many of them, like Davis, have remained in theindustry with private investment companies - hoping to cash inas major miners shed unwanted assets and few queue up to buy.

In a statement on Monday, the companies said X2 Resourcesplanned to create a "mid-tier diversified miner and metalsgroup", whose output would eventually be marketed by Noble, arival of Glencore's.

The statement said Davis' team, which also includes formerXstrata finance director and long-time boss Trevor Reid, was indiscussion with "a further select group" of potential investors.

Goldman Sachs acted as financial adviser to X2.

(Reporting by Clara Ferreira-Marques; Editing by Tom Bill andLouise Heavens)

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