Shares in Anglo American have soared after an Indian billionaire said he would spend up to £2bn taking a stake in the miner.
Anil Agarwal, who controls Vedanta, said on Wednesday he would make the investment through his family trust Volcan Holdings.
The statement from Volcan said neither the trust nor Vedanta intended to seek control of Anglo.
Buying a stake of about 12% in Anglo would diversify Mr Agarwal’s holdings.
Vedanta focuses on commodities including zinc, lead, silver, copper, iron ore and aluminium, while Anglo’s portfolio includes diamonds and platinum.
“This is an attractive investment for our family trust … I am delighted to become a shareholder in Anglo American,” Mr Agarwal said.
Anglo reported a huge pre-tax loss of $5.5bn (£3.8bn) for 2015 following the plunge in commodity prices.
However, its shares jumped nearly 300% last year and in February the company said it would resume paying dividends and slow down the pace of asset sales.
Anglo American shares jumped 8.5% to £12.96 in morning trading in London, while Vedanta also rose 5.2% to 878p.
Other mining companies including Antofagasta, Fresnillo, BHP Billiton and Randgold Resources also posted strong gains to help lead the London market to a new record high on Thursday.
Miners have been boosted by a fall in the dollar after the US Federal Reserve indicated a slower pace of interest rate rises than the market had been expecting.
A weaker greenback helps dollar-denominated commodities, as it makes them cheaper for customers paying in other currencies.
Mr Agarwal is using a “mandatory exchangeable bond” to finance the share purchase.
Industry sources said the financial instrument was the first of its kind and was an efficient way of acquiring such a big stake.
ARTICLE RETRIEVED FROM : http://www.bbc.com/news/business-39288889