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Bangalore-based iron ore mining firm Mineral Enterprises (MEL) has doubled its stake in Australian Lincoln Minerals to 10.17%. So far, the company was holding close to 5% stake in ASX-listed Lincoln. Mineral Enterprises Australia (MEA), a wholly-owned subsidiary of MEL and a joint venture partner of Lincoln, has begun drilling work on latter’s gum flat iron ore project in South Australia. Post drilling session, MEL may also ask for a board seat in Lincoln.

The acquisition of additional stake makes MEL along with its subsidiary MEA the largest shareholder of Lincoln after mining firm South Cove which holds 18% stake in the company. The additional shares were purchased by MEL from the open market for close to Rs 10 crore. Sources say the company is ready to shell out another $20 million to acquire 50% stake in the company in future.

Few months ago, the Indian firm, promoted by Bangalore-based Poddar family, expressed interest to raise its stake in Lincoln to 20% which faced opposition from a group of 6-7 Chinese shareholders, who together own close to 15% stake in the Australian group. Bowing to investor pressure, Lincoln suspended the proposed rights’ issue and decided to take up the matter only after its extraordinary general meeting.

When contacted, MEL managing director Basant Poddar said, “We have cordial relations with the Lincoln management and as of now we don’t intend to have a seat on the company’s board. Let us see how things shape up once the drilling work progresses. Looking at the ongoing financial crisis, we are moving forward slowly and cautiously.”

Last year, MEL had entered into a JV agreement with Lincoln, under which it had acquired mining rights for 40% of the gum flat iron ore exploration project for $2.5 million. The drilling work on the block, which is estimated to have iron ore reserves of close to 250 million tonnes, has commenced. Besides Australia, MEL is eyeing mineral resources such as uranium, manganese, coal and gold in countries such as South Africa, Indonesia and Malaysia. The Indian firm has been extracting iron ore for over four decades and has reserves of around 2.5 million tonnes in South India. On the other hand, Lincoln has interests in other metals, such as zinc, copper, uranium and gold.

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