National Mineral Development Corporation Ltd (NMDC) yesterday submitted a formal bid for acquiring a 50-per cent stake in Australian exploration company Legacy Iron Ore.

The proposed acquisition, expected to cost around $40 million (Rs200 crore), will give the state-owned miner rights to Legacy's vast rock phosphate and iron ore deposits.

Hyderabad-based NMDC, India's largest iron ore miner, declined to comment on the deal size, citing confidentiality.

Perth-based Legacy yesterday said in a filing with the Australian Securities Exchange (ASX) that it has received a formal proposal from NMDC for a strategic alliance. Trading of its shares has been halted till today.

''The company wishes to provide an update on a formal offer received from National Mineral Development Corp. (NMDC) of India regarding a proposal to form a strategic alliance via a cornerstone investment,'' Legacy said in its filing.

In August Legacy Iron Ore had granted NMDC an extension of time to finalise the necessary internal approvals to enable the state-owned miner to make a formal offer for Legacy.

Legacy had, on 24 August, announced a two-day trading halt on the ASX, anticipating a bid from NMDC. However the iron ore explorer had said in its filing with ASX on 26 August that the bid is likely to be made in the second half of September.

The stake sale would help Legacy unlock and monetise its iron ore mines while, at the same time, helping NMDC to secure supplies of both iron ore and rock phosphate in the country.

Legacy's rock phosphate deposits in Wonarah is Australia's largest known undeveloped phosphate rocks and the acquisition will help secure supplies of a critical raw material for the Indian fertiliser industry, NMDC said in its stock exchange filing.

India is the world's biggest importer of rock phosphate and ammonium phosphate fertilisers.

While NMDC did not disclose the size of the project, the Australian Financial Review had pegged the Wonarah rock phosphate project at A$1.5 billion in a report.

Legacy Iron Ore holds prospective iron ore tenements in both the central Yilgarn and Pilbara areas of Western Australia and holds five exploration licences related to iron ore and gold mining.

According to Legacy, the stake sale would enable it to unlock and monetise the value inherent at its Mt Bevan iron ore mines and gain large cash infusion.

On the other hand, NMDC is looking to secure supplies of iron ore and rock phosphate to feed burgeoning demand in the country and had inked an MoU with Legacy Iron on May 24 to acquire a 50-per cent equity stake in the Australian company.