New Delhi: Hindustan Zinc Ltd has solid grounds for its planned acquisition of parent Vedanta Ltd’s global zinc assets, chief executive officer Arun Misra said, adding he will speak to government officials soon to resolve their opposition to the deal. According to the Union mines ministry, the HZL board’s January decision to acquire these assets violates minority shareholder rights. Vedanta owns a 64. 9% stake in HZL and the government of India 29. 5%. TRENDING STORIES See All Premium Don’t count on China to save the world economy Premium Could electric vehicles be hacked? Premium Tesla recalls over 3 lakh cars due to self-driving cras . . . Premium Spain passes 'menstrual leave' law in first for Europe “What is the strategic content? The purpose (of this deal) is undoubted and indisputable. The mechanism can be the problem. So, it is the mechanism we are talking about, and we will see the mechanism," Misra said in an interview. Misra said that he had not discussed the issue with government officials yet, but would do so soon. “It is a timing issue – the government wants to divest the rest of its stake in the company, and we want to expand. . . We need to figure it out after I speak to them directly," he added. Being a related-party transaction, the proposal needs majority approval from minority shareholders, including the government, whose shareholding is classified as public shareholding. According to Misra, a company like HZL cannot limit its size and capacity to where it is today; it must grow much beyond and tap other mineral sources across the world. “If you look at global mining companies, they have mining properties in many countries and continents. HZL has the potential – It is a cash-rich company and has the knowledge and executive firepower. We need to unleash the potential of the company," Misra said. India’s annual zinc consumption is 650,000-680,000 tonnes and is expected to grow 3-4%, Misra said. HZL produces about 800,000 tonnes annually. “Whatever we expand in India, it will only be for exports. And beyond a point, our export market in Southeast Asia will also saturate. . . Hence, I have to export to Europe or the US. Being in India and exporting to those countries will not be profitable and worthwhile," Misra said. The HZL board on 19 January obtained approval for the acquisition of Zinc International assets of THL Zinc Ventures Ltd (Mauritius), a wholly owned subsidiary of Vedanta, through THL Zinc Ltd (Mauritius). THL Zinc Ltd will become a wholly owned subsidiary of Hindustan Zinc. Government officials have been cited as saying that its representative on the board opposed the proposal at the meeting. “We will oppose the transaction through the ministry of mines in the AGM/EGM, and scuttle the proposal since it is not in the interest of minority shareholders. It’s a related party transaction which requires far more due diligence, but till that time, any plans to divest our shareholding cannot move ahead," a top government official said on the condition of anonymity. The government plans to sell the residual stake in HZL in tranches of about 5-10% to start with, but the move is unlikely to materialise in the near term, and the disinvestment itself may be in limbo for some time. MINT PREMIUM See All Premium Bad news awaiting tech grads entering the job market Premium The week in numbers: inflation, exports, appraisals, an . . . Premium Why trade settlement in rupee is off to a tentative start Premium Why big biz wants licence to lend Misra said he cannot comment on board discussions. “Every decision has the approval of the board. And we do not comment on what happened inside the board meeting," he said. Misra said that these huge investments would be scrutinized, and he would work to bring minority shareholders (the government) on board, as this is necessary for the company to grow. “I have been looking for assets in Europe, Latin America and South Africa, and we need to get a foothold somewhere to cater to the Western world. These decisions or any other decision for investment will always be up for scrutiny from a similar angle. As a CEO, I believe HZL must do. . . there is no point limiting itself to the current capabilities," Misra said. A JM Financial Institutional Securities 19 January report titled ‘Much needed growth optionality, albeit at expensive valuations,’ said: “The company shall seek shareholder approval in February while other approvals are expected within 18 months. " Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News . More Less OPEN IN APP.