State-run miner NMDC has signed an agreement to acquire up to 50% stake in Legacy Iron Ore, an Australian mineral exploration company. The cost of acquiring shares is yet to be determined as the proposal is still in early stages. The company also needs regulatory and shareholder’s approval for the same.
The MoU will give access to NMDC to get into Australia and devise further strategy with Legacy Iron Ore who has interests in gold and manganese, besides iron ore. The valuation of the stake is yet to be done and once the deal is approved by shareholders, NMDC can appoint nominees to the board of Legacy. NMDC intends to use Legacy as a vehicle to acquire large-scale Australian bulk commodity projects such as coal and iron ore. This is the first investment of its type by NMDC into the Australian resource sector.
Recently, NMDC was planning to invest up to Rs 2,400 crore (about $500 million) this fiscal to acquire coal and iron ore assets overseas and is hopeful of finalizing the deals by middle of this year. The company can spend one-third of its net worth on overseas acquisitions which comes to Rs 5,400 crore (about $1.2 billion). This fiscal it has targeted to invest up to Rs 2,400 crore. The country's top iron ore producer is targeting four assets, including two coal and two iron ore, in Russia, the US, Australia and Africa.
| Company Name | CMP |
|---|---|
| Coal India | 438.70 |
| NMDC | 89.78 |
| GMDC | 733.40 |
| Sandur Manganese | 218.35 |
| MOIL | 327.60 |
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