Sovereign wealth funds, of the sort operated by the oil-rich states around the Persian Gulf, are sniffing around mining, and quite like the similarities it has with oil.

Mixing mining and oil has been tried before, with BHP Billiton the only company successfully operating divisions in the twin arms of the resource industry.

The failure of other mining companies to understand oil, or for oil companies to understand mining, is not likely to stop the Gulf States from seeking new ways to diversify their investment portfolios.

Saudi Arabia has already done a bit of that through an aluminium making joint venture with Alcoa and, there are limits to the number of airlines the Gulf States can operate or office blocks they can buy in London and New York.

And that’s before considering the question of mining company share prices tumbling to their lowest in several years, making it an opportune time for an oil-rich state to acquire a big position in sector leaders such as BHP Billiton and Rio Tinto – which already has a Chinese government-controlled investor (Chinalco) on its share register.

Qatar, which is sitting on enough gas to keep it at the top of the world’s richest countries for the next 100 years, has been the first to emerge as a serious player on the share register of a big miner via its controversial 11% stake in Xstrata.

Widely-reported as a “blocking stake” on the Xstrata register, and a way to make a quick profit in a takeover struggle, the Qatar stake could turn out to be something far more important.

Rather than seeking to simply force Xstrata’s biggest shareholder and commodity trader Glencore International to pay a higher price for total control, it is possible that Qatar is seeking control of Xstrata for itself.

Nor much has been suggested along those lines since Qatar snatched its 11% stake in Xstrata and took on the leading role in frustrating a plan that Glencore had been quietly working on for the past decade.

Most observers see Qatar as wanting to use its stake to force better terms out of Glencore, which earlier this year lobbed a share-swap takeover on the terms of 2.8 of its shares for every Xstrata share.

Qatar, and other investors in Xstrata, said they would prefer more generous terms, with a suggestion that 3.25 Glencore shares for every Xstrata share would be more acceptable.

Opposition to its bid has annoyed executives at Glencore, which is already sitting on a 34% stake in Xstrata, and sees the two companies as a natural fit, even though it would mean bringing together a “hard” commodities business in Xstrata with its worldwide mining interests, and a “soft” business in Glencore with its food and textile divisions.

Enter Qatar, which has dealt itself a strong hand with its 11% Xstrata holding because under the terms of the Glencore deal it cannot vote the Xstrata shares it already owns, making it easy for Qatar to round up enough friends to stymie Glencore’s hand.

With voting power over the Xstrata deal under its control, and with enough spare cash to acquire either Xstrata or Glencore (or both), the world is now waiting for Qatar’s next move because if it refuses to budge then the mining world will be looking at a new and powerful player in its backyard.

A lot could happen over the next six months in the Xstrata/Glencore/Qatar situation.

Glencore could increase its Xstrata merger terms to three of its shares and Qatar could accept, to become one of Glencore’s biggest shareholders and be in a position to eventually control the merged business as Glencore’s founding shareholders among its executive ranks opt for an easier life and sell down their personal stakes.

Or, Qatar could “greenmail” a cash sweetener out of Glencore, or it could lob its own cash counter bid for Xstrata, putting pressure on Glencore to decide whether it wants a huge pile of Qatar’s cash to go hunting for another target (BHP Billiton springs to mind).

Whatever happens, Qatar’s very public intervention in the once sweet marriage that Glencore and Xstrata had planned for themselves is proving to an interesting insight into the thinking of oil-powered sovereign wealth funds.

Mining might be foreign to the Gulf States, but so once were airlines, until Abu Dhabi’s Etihad followed Dubai’s success story with Emirates, and Qatar tagged along with its namesake airline.

If aviation works for the Gulf States, then why not mining? It’s got a lot more in common with oil.

This article first appeared in ILN's sister publication MiningNews.net.