* Plans 1.7 trln-1.9 trln yen investment over next three years
* Iron ore, LNG, oil are focus of resource investment
* Non-resource units steadily growing, hit record profit last year
By Yuka Obayashi and Yoshiyasu Shida
TOKYO, May 24 (Reuters) - Japan's Mitsui & Co is confident it can generate at least 400 billion yen ($3.6 billion) of core operating cash flow in each of the next three years even if commodity prices remain turbulent, its company head said on Wednesday.
"Even under our worst scenario for commodity prices, we are confident to achieve a target of securing 400 billion yen a year in core operating cash flow with stable contributions from our non-resource businesses," Mitsui's CEO and president, Tatsuo Yasunaga, told Reuters in an interview.
Mitsui, Japan's second-biggest trading house by assets, returned to profitability in the fiscal year ended on March 31, lifted by higher prices for iron ore, after logging its first-ever annual net loss a year earlier amid a global slump in commodities markets.
But the swing from loss to profit for the 2016/17 year underlined Mitsui's dependence on the strength or weakness of commodities prices, even after years of trying to diversify its operations into non-cyclical businesses.
"We are still on the way to create an ideal portfolio, but our non-resource businesses are steadily growing and their profit reached a record last year," Yasunaga said.
"Our management focus will remain on cash flow," he said, pointing to its goal to boost core operating cash flow to 630 billion yen in the year to end-March 2020 as part of a new strategy unveiled this month.
Under the plan, Mitsui plans to invest a total 1.7 trillion-1.9 trillion yen over the next three years, 32.5 percent of which will be spent on resource assets and the rest on sectors such as machinery and chemicals. The trading company also targets a record net profit of 440 billion yen in the year to end-March 2020.
"In resource areas, we'll selectively invest in new or existing assets that are competitive enough not to book any huge writedowns at a time of a commodity slump," he said.
Mitsui, a major iron ore producer, intends to invest mainly in iron ore, liquefied natural gas (LNG) and oil. It has no plan to invest in new thermal coal mines given growing concerns over the environment.
To strengthen its governance, Mitsui appointed Sam Walsh, a 67-year-old former chief executive of Rio Tinto, as an external director, subject to shareholder approval next month.
"As we operate in 66 countries, we need an outside voice from someone with business expertise," Yasunaga said.
Yasunaga, 56, who took Mitsui's top job in 2015, said diversification of assets and operations is the only answer to offset growing geopolitical risk.
"It's risky to bet on one area. We'll need to diversify our geographical portfolio."
$1 = 111.8700 yen Reporting by Yuka Obayashi; Editing by Tom Hogue