Brazil's Cosan buys local sugar mill for $61 mln

SAO PAULO, Feb 14 (Reuters) - Cosan (CSAN3.SA), Brazil's biggest sugar and ethanol group, said on Thursday it had agreed to buy a local mill called Usina Benalcool for 106.9 million reais ($61 million).

Cosan, which is also seeking to invest in ethanol distilleries outside Brazil, said in a statement to the local securities regulator that it would use existing cash flow to pay for the acquisition.

Benalcool is a sugar and ethanol producer with the capacity to crush 1.3 million tonnes of cane a year. It is located in Aracatuba, in the heart of Brazil's cane belt in Sao Paulo state.

Cosan, which already has four mills in the area, will also assume about 34 million reais of Benalcool's debt.

($1=1.751 reais) (Reporting by Todd Benson; Editing by Walter Bagley)