NMDC to Acquire 50% Stake in Legacy Iron Ore

25 May 2011 (Last Updated May 25th, 2011 18:30)

Indian firm NMDC has signed a memorandum of understanding with Australia-based Legacy Iron Ore to acquire up to a 50% stake in the company. NMDC chairman and managing director Rana Som said the proposal is still at a preliminary stage and the price of shares is yet to be determined.

Indian firm NMDC has signed a memorandum of understanding with Australia-based Legacy Iron Ore to acquire up to a 50% stake in the company.

NMDC chairman and managing director Rana Som said the proposal is still at a preliminary stage and the price of shares is yet to be determined.

The share acquisition will need approval from Legacy shareholders within 28 days from the execution of the agreement.

On completion, the agreement will provide a platform for Legacy to source and secure additional resource projects for development and financing with the backing of NMDC as Legacy's largest shareholder.

NMDC intends to use Legacy as a vehicle to acquire large-scale bulk commodity projects such as coal and iron ore mines in Australia.

NMDC currently produces 30 million tonnes of iron ore per year and is the largest iron ore producer in India, with reported resources in excess of 800 million tonnes.

Legacy CEO Sharon Heng said that with increased funding and significant financial backing the firm will be able to seek the acquisition of new projects.