UPDATE 3-India opposes Vedanta's $3 bln zinc assets sale, threatening debt-cut plans

(Recasts, adds background, Hindustan Zinc statement) By Chris Thomas and Meenakshi Maidas BENGALURU, Feb 20 (Reuters) - Vedanta Resources' efforts to manage its debt load were dealt a blow after the Indian government opposed the mining conglomerate's proposed $2.98 billion deal to move certain zinc assets from its flagship company to another in which it is a majority shareholder. The government opposed Hindustan Zinc Ltd , in which it holds a near 30% stake, buying the Africa-based assets from Vedanta Ltd , its top shareholder with a near-65% 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 CNBC-TV18. The company and Vedanta Ltd did not respond to Reuters' 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, to $7.7 billion, seeking to allay concerns days S&P Global Ratings raised doubts about the billionaire Anil Agarwal-owned group's financial health. S&P Global had said the group's ability to meet its financial obligations beyond September would depend on a planned $2 billion fundraise 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 government-nominated directors on Hindustan Zinc's board opposed the acquisition and said in a letter they would oppose further resolutions. However, the Ministry of Mines, in its letter, urged Hindustan Zinc to "explore other cashless methods" for the deal. The government is looking to sell its entire stake in Hindustan Zinc as part of its efforts to replenish state coffers. The deal, analysts have said, is unfavourable to Hindustan Zinc's minority shareholders, who have to sign off any board decision on related party deals in a meeting that Hindustan Zinc has to call within three months of announcing the deal. Hindustan Zinc said in an exchange filing it had not yet called for the meeting but its board would consider the government's position. While miner Vedanta Ltd, has been hit by a fall in commodity prices, Vedanta Resources is betting growth will be bolstered by its associate firms' investment in areas like semiconductors, display glass, renewables, optical fibre, and transmission. Hindustan Zinc's shares have lost nearly 14.5% since the deal was announced a month ago, while Vedanta Ltd'd shares have lost about 5%. Both stocks were little changed on the day. (Reporting by Meenakshi Maidas and Chris Thomas in Bengaluru; Editing by Dhanya Ann Thoppil, Devika Syamnath and Savio D'Souza)