BENGALURU, Feb 20 Reuters The Indian government has opposed Hindustan Zinc Ltd39;s 2.98 billion acquisition of assets from the flagship firm of Vedanta Resources, dealing a blow to billionaire Anil Agarwal39;s plans to trim down the mining giant39;s 7.7 billion net debt.

The government, which owns a nearly 30 stake in Hindustan Zinc, is against the miner buying some Africabased zinc assets from Vedanta Ltd  its top shareholder with a near65 stake as it was a related party transaction.

We always believe in and operate in perfect manners of corporate governance, so there is no deviation on that count, Hindustan Zinc Chief Executive Arun Misra told CNBCTV18. The company and Vedanta Ltd did not respond to Reuters39; request for comment.

The development comes a week after Vedanta Resources said it had slashed net debt by 2 billion in the last 11 months, with plans to cut it further, seeking to allay concerns after SP Global Ratings raised doubts about the group39;s financial health.

SP Global had said Vedanta Resources39; ability to meet its financial obligations beyond September would depend on a planned 2 billion fundraising as well as the proposed sale of THL Zinc Ltd, a Vedanta Ltd unit that holds zinc assets in Africa.

That deal, announced on Jan. 19, is now in doubt after the governmentnominated directors on Hindustan Zinc39;s board opposed the acquisition and said in a letter dated Feb. 17 that they would oppose further resolutions.

Flexibility comes down…