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COMPANIES
Resources rockstars
The commodities bosses with the midas touch
Resources rockstars
January 17, 2014
By Matthew Allan
How do they do it? The probability of a mining or oil and gas exploration company achieving commercial success is incredibly small, yet a small number of natural resources executives always seem to pick the winning horse.
Take Mick Davis, former chief executive of Anglo-Swiss mining giant Xstrata. A chartered accountant from South Africa, Mr Davis began his career at Peat Marwick, the accountancy group that expanded to become KPMG. He later became chief financial officer of a company he helped turn into the resources behemoth that is now BHP Billiton (BLT). And, in 2002, at the bottom of the last major mining downturn, he joined Xstrata where he led the acquisition of Glencore's (GLEN) unloved coal assets and listed the company's shares in London.
Over the next 10 years, Mr Davis spearheaded a string of acquisitions and mergers that increased Xstrata's market capitalisation a hundredfold to $55bn. For investors, this meant a ninefold share price rise from 2003 to the heady days of early 2008, and a threefold share price rise from the dark depths of the financial crisis to Glencore's drawn-out takeover of Xstrata last year. Mr Davis has since raised $1bn for a new private mining venture, X2 Resources, and his backers are betting he has got his timing right again by shopping for mining assets at another low point in the commodities cycle.
True, very few natural resource executives stack up to Mr Davis either in stature - his imposing height and voracious appetite for acquisitions earned him the nickname 'Big Mick' - or in sheer magnitude of success. But there are dozens of seasoned professionals who repeatedly line the pockets of retail investors by regularly achieving commercial success with their ventures.
With mining equity valuations approaching three-year lows, and oil and gas equities also depressed, now could be a good time to start digging around for the bargain-priced companies run by management who have successfully grown or sold resource venture across several commodity cycles.
We take a look at 10 such executives below, and highlight a few key bull and bear points about their current businesses.
Algy Cluff
John 'Algy' Gordon Cluff is a man who needs little introduction to longstanding Investors Chronicle readers. The septuagenarian has founded four successful resource companies during a City career spanning the best part of four and a half decades. He launched a fifth venture, Cluff Natural Resources (CLNR), in the spring of 2012.
Company What happened to it
Cluff Oil Sold in 1970 for £14m
Cluff Resources Sold to Ashanti Gold for £100m in 1996
Cluff Mining (later Ridge Mining) Sold to Aquarius Platinum for £150m in 2009
Cluff Gold (recently renamed Amara Mining) The company’s market capitalisation has fallen from £130m to ju
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