gilbertson may up price, page-6

Ex-BHP head leads up to $1.5 bln resource investment
Mon 28 May 2007, 12:58 GMT

JOHANNESBURG (Reuters) - An investment group led by former BHP Billiton chief Brian Gilbertson, finance group Investec and coal firm AMCI plan to pool up to $1.5 billion to invest in global natural resources, they said on Monday.

Gilbertson chairs Pallinghurst Resources, which operates like a private equity fund and is seeking investments mainly in developing countries, his son Sean, a partner in the firm, said.

The group has already bought the Faberge brand from consumer group Unilever to be revived as a diamond and luxury goods group, Sean Gilbertson told Reuters in an interview. (To see interview, double click on.

"In broad terms we would look at any commodity and we will also look at any geography," he said.

His father is a renowned dealmaker who engineered the $57 billion takeover of BHP by Billiton in 2001 to create the world's biggest mining group.

Privately held American Metals & Coal International (AMCI) and Investec have agreed to each invest up to $200 million. The partners are also in advanced talks with an Asian steel firm for a commitment of $100 million, a statement said.

"We're hoping to raise somewhere between half a billion and a billion dollars for the Pallinghurst Resources fund itself," Gilbertson said.

Merrill Lynch and Investec were raising funds from institutions and individuals for the Pallinghurst fund, a process which was due to close in a matter of weeks, he added.

EMERGING MARKETS FOCUS

Although the partners would be open to a broad spectrum of resource investments, it would shy away from gold and focus on emerging regions like Africa, the former Soviet Union, and Asia, Gilbertson said.

"Given the magnitude of the mining boom, assets in developed countries are rather more expensive than those in developing countries," Gilbertson said.

Brian Gilbertson had recently been president of Russia's SUAL, but was not named to the board in March when it merged with RUSAL and assets of Swiss-based commodities trade Glencore to form the world's largest aluminium producer.

The other principals of Pallinghurst were Arne Frandsen, former investment banker and ex-head of small South African platinum firm Incwala Resources, and Priyank Thapliyal, a former official with London-listed mining firm Vedanta Resources.

In February, Gilbertson's Pallinghurst Resources and AMSI announced a proposed A$520 million private equity buyout of mid-capped Australian miner Consolidated Minerals Ltd..

Investec has now been invited to participate in the Consolidated transaction as part of the investment deal.

An investment vehicle of the three partners would own 60 percent of Consolidated while existing shareholders of the Australian firm would own the remainder.

Consolidated supplies 10 percent of the world's manganese but it is pushing to mine deep nickel lodes across the Australian outback and holds 32 percent of copper and zinc prospecting firm Jabiru Metals Ltd..

AMCI and its subsidiaries have been involved in the international coal business for more than three decades. It has substantial holdings in the United States and participated in forming Alpha Natural Resources, a leading Appalachian coal miner.