Govt takes note of NMDC's Legacy acquisition

Govt takes note of NMDC's Legacy acquisition New Delhi: The government Thursday took note of NMDC's acquisition of 50 percent stake in Australia's Legacy Iron Ore for Rs 99.63 crore.

"The Cabinet Committee on Economic Affairs today noted the acquisition of 50 percent equity shares by NMDC ... In Legacy Iron Ore, which is a listed entity in Australian Stock Exchange at a total investment of Rs 99.63," an official statement said.

"The acquisition process has been completed and NMDC is now a majority shareholder on the Board of Legacy," it added.

NMDC's acquisition of Legacy is the first overseas buy of iron ore resources by a state-run firm.

"This initiative will encourage further acquisition of strategic raw materials overseas by other PSUs for long term mineral security for domestic industry," the statement said, adding that NMDC has sourced the funding from its internal accruals.

Legacy is a Perth-based exploration company with focus on iron ore, gold, manganese and base metals. Incorporated in April, 2007, Legacy was listed on the Australian stock exchange in July 2008.

Legacy has six exploration stage projects in Western Australia and has 11.18 percent shareholding in Hawthorn Resources Ltd (Hawthorn), the registered owner of Mt Bevan iron ore tenements and a listed company on the ASX.

NMDC aims to raise its iron ore production capacity to 48 million tonnes per annum (mtpa) by 2014-15 from current installed capacity of 32 mtpa.

The company has been actively pursuing the acquisition of overseas strategic mineral assets with the aim of meeting its own requirements and also towards raw material security for the country's steel and fertiliser industries.

Following the acquisition of Legacy, NMDC is also eyeing more acquisitions in Brazil, Mozambique, Russia, USA and South Africa.

PTI