-- Neil Collins is a Reuters columnist. The views expressed are his own --
By Neil Collins
LONDON, June 23 (Reuters) - If you want excitement, then Mick Davis is your man. Xstrata, the company he runs, has been up like a rocket and down like the stick since it burst on an unsuspecting London stock market in 2002.
At the top of last year's commodities boom, an original investor would have multiplied his money seven times, but he'd have had to be nimble to realise his gain, as the price plunged from 24 pounds to 325 pence in seven months.
By comparison Anglo American, Xstrata's intended victim -- sorry, partner -- fell by a mere two-thirds following the collapse of the commodities boom.
Davis loves deals, and his advisors love him as a result. Please don't mention the fees, but today's biggest miners are really big, with both Anglo and Xstrata valued at over $30 billion, enough to cover the bonuses of the greediest investment bankers.
For outside shareholders, on the other hand, Davis's record is not pretty. He failed to sell Xstrata to Vale of Brazil during the boom, botched a bid for Lonmin and when asking shareholders for more money, agreed a sweetheart deal with 35 percent shareholder Glencore because it couldn't afford to take up its rights.
Despite these setbacks, his reputation remains high, unlike that of Cynthia Carroll, his opposite number at Anglo, who has been the victim of a whispering campaign, with anonymous shareholders muttering about her ability to deliver cost cuts.
Hard evidence for this is notably lacking, but it is very convenient for Xstrata, and mining analysts are obsessed with costs, perhaps because predicting commodity prices is too difficult. Creating AngXstrata (or whatever) would save between $700 million and $2.2 billion a year, analysts estimate. However, the prospect of thousands of South African jobs disappearing to enrich Swiss, American and UK shareholders is not a cheerful one, and there are other reasons to be nervous.
The paroxysm of deal-making which is running through the sector will push pricing power into the hands of a few giant companies, in a way the competition authorities may find hard to resist. With its rich resources, South Africa might be considered a beneficiary of higher prices, but Mining Minister Susan Shabangu was in no doubt on Tuesday. Calling the proposal "unacceptable", she added: "Monopolies cannot be promoted in South Africa."
As she did not need to add, the cultural differences between the companies are stark. Xstrata is essentially a commodities acquisition shop, while Anglo is a conventional mining business. The confluence of the market values gives Xstrata the chance to talk about "equals" but the history has been very different. Surely, you're not just taking the Mick, Davis?