UPDATE-1 SAIL eyes overseas coking coal mines

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KOLKATA, Nov 17 (Reuters) - State-run Steel Authority of India Ltd (SAIL.BO: Quote, Profile, Research), the largest producer of the metal in the country, is looking at acquiring licences for coking coal mines abroad to insulate itself from raw material price fluctuations, its chairman said on Tuesday.

SAIL is in talks with firms in Australia, New Zealand, Mozambique and Indonesia, Chairman S.K. Roongta told reporters.

"We are looking at both operational and exploration licences. We are looking to secure 30-40 percent of our coking coal needs through acquisitions," Roongta said.

The firm's current annual coking coal requirement stands at 15 million tonnes.

The steel maker would invest around 600 billion rupees over the next three years for an additional capacity of 9 million tonnes, he said.

It currently produces 13 million tonnes of steel annually.

"In the current financial year, we would invest 100 billion rupees and add 1 million tonnes in capacity through upgradation. By 2012, we would add another 9 million tonnes," Roongta said on the sidelines of a seminar.

SAIL also plans to start a greenfield project in the eastern state of Jharkhand with a capacity of upto 12 million tonnes.

It has obtained leases to mine 810 million tonnes of iron-ore in the Chiria iron-ore belt in Jharkhand and is in lease talks to mine another 200 million tonnes of ore, Roongta said.

SAIL is entitled to mine 1 billion tonnes of iron ore in the Chiria region as part of a recent settlement between the federal and the state government. (Reporting by Niladri Bhattacharya; Editing by Malini Menon)