Tata Steel may build steel unit in S.Africa-source

NEW DELHI, Sept 11 (Reuters) - India's Tata Steel Ltd (TISC.BO), the world's sixth-largest steelmaker, is looking at building a steel plant in South Africa, a senior company source said on Tuesday.

"Talks are on," the official, who did not want to be identified, told Reuters. "It could be around 5 million tonnes if they give us coal and iron ore mines."

He did not elaborate on the investment plan.

Tata Steel, which bought Anglo-Dutch Corus for $12.9 billion this year, has said it was setting up a ferro chrome plant in South Africa with an investment of 4 billion rupees ($98.5 million).

In August, the company said it would spend $85.7 million to buy a 35 percent stake in a Mozambique coal project run by Australia's Riversdale Mining Ltd (RIV.AX), which would provide coking coal for its plants in Europe and India.

Tata Steel, which currently imports 1.3 million tonnes or 30 percent of its annual coal requirement, sees that rising to 2 million tonnes in future, the official said.

"Our aim is to be about 50 percent self-sufficient." ($1= 40.6 rupees)