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The deal was executed by the board of NMDC – the country’s largest iron ore producer and exporter – and the acquisition was funded by its internal accruals.
“This is the first overseas acquisition of iron ore resources by an Indian public sector unit (PSU) and this will encourage further acquisition of strategic raw materials overseas by other PSUs for long-term mineral security for domestic industry,” a statement from the ministry read.
NMDC is now the majority shareholder of the company that is currently developing the Mt Bevan iron ore project with a reserve of 1.59 billion tonnes of magnetite iron ore of 30.2% Fe grade.
NMDC and Legacy signed a memorandum of understanding in May 2011 and entered into a share-subscription agreement in October that year.
The former transferred the first tranche of $1.45 million to the latter in January 2012 before making the second and final payment of $16.6 million the following month, thus completing the total investment of $18.05 million.
Legacy is a Perth-based company that focuses on iron ore, gold, manganese and base metals.
It has six exploration stage projects in Western Australia and also holds an 11.18% stake in Hawthorn Resources Ltd.
India's National Mineral Development Corp (NMDC) has completed its $18.05 million acquisition of a 50% stake in Australian exploration company Legacy Iron Ore Ltd, the Ministry of Steel said.