National Mineral Development Corporation (NMDC) on Thursday said it has signed a memorandum of understanding (MoU) with Legacy Iron Ore Ltd of Australia to acquire 50 per cent stake in the Australian mining company. This will flag off NMDC's plans to acquire iron ore and coal assets in Australia.

“By this investment, NMDC would expand its geological footprint and position itself for acquisition of additional mineral assets in iron ore and coal in Australia. The (deal) is subject to due diligences and necessary approvals,” the company said in a communication to the stock exchanges.

Deal size

Although NMDC has not indicated the deal size, sources following the deal say the acquisition may be worth about $30 million. NMDC expects to wrap up financial due diligence within 90 days.

Legacy, which has licences for two iron ore projects in Australia with an estimated reserve of over 130 million tonnes, is also into gold and manganese mining, besides having plans to foray into coal.

NMDC has been in talks with another Australian company, apart from Legacy, for taking over management control of iron ore mines at exploration stage. “However, the deal with the second Australian company is expected to take some more time to materialise. NMDC's strategy to take over projects at the exploration stage is to keep immediate investments at a lower level,” the source said.

Apart from these two, NMDC is in talks for four more similar mining projects, including coal mines, in Australia, Mozambique and Albania.

The company is also negotiating with Anglo-Australian mining major Rio Tinto to renew the two year MoU to work jointly on iron ore and coal mining assets in Australia and Africa.

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