Peter Ker

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Digging for gains: Olympic Dam is one of the mines Hugh Morgan managed during his time at Western Mining. Photo: Peter Ede

Former Reserve Bank board member and Western Mining Corporation boss Hugh Morgan is set to join the list of former mining bosses to establish their own private funds amid the market downturn for resources stocks.

Joining the likes of former Xstrata boss Mick Davis, who revealed last week he had raised $US5.6 billion ($7.3 billion) for his private fund, Mr Morgan confirmed that he, too, was working on a private fund that would seek to take advantage of the current low asset prices in the mining sector.

Mr Morgan stressed that the fund was still in its formative stages, and had not yet started raising money.

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Hugh Morgan joins a growing list of mining luminaries hunting mining assets for their private investment vehicles. Photo: Sasha Woolley

But he confirmed that work was under way in Melbourne.

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It is still very much in the emerging stages in terms of putting it together, he said.

Mr Morgan said the fund was likely to focus on investments in the base metals sector.

We will be focusing on copper and gold and base metals mostly, he said.

During his career at Western Mining, Mr Morgan managed some of the largest and best base metals mines in Australia, including the Olympic Dam and Nickel West operations that now reside within BHP Billiton.

He was also chairman of the World Gold Council between 1989 and 1991 and spent two decades on the board of Alcoa of Australia.

The gold prices has fallen 40 per cent since its peak in September 2011, but has traded in a range of $US1140 to $US1400 per ounce for the past 19 months.

Despite slipping lower before Christmas, copper prices are expected to be among the best-performing commodities over the next decade.

A shortage of copper is expected to emerge within two of three years, driving up prices for the conductive metal.

Private equity has been expected to emerge as a key player in resources investment for several years now, given many small producers are struggling to find finance while big companies are looking to divest non-core assets.

Aside from Mr Morgan and Mr Davis, former Barrick Gold managing director Aaron Regent has also set up a private mining fund in recent years dubbed Magris Resources, which has already acquired a Niobium mine in Quebec.

Several other former Barrick executives are hunting for base metal and platinum group assets on behalf of Waterton Global Resource Management, which has $US1 billion to spend, while a collection of former Anglo American and JPMorgan executives are looking to make smaller investments in base metals via their new private vehicle Appian Natural Resources Fund.

Closer to home, former Oxiana boss Owen Hegarty has raised $US450 million for his EMR Capital fund, which is the biggest shareholder in market darling Highfield Resources.

Highfield is developing a potash project in Spain, and its share price has almost doubled in the past three months.

Former BHP executive Alberto Calderon has also sought to set up a private equity group focused on royalty streaming deals, and already has one such royalty agreement with local bauxite aspirant Gulf Alumina.