RPT-UPDATE 1-Bunge and Itochu announce sugar mill in Brazil

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BRASILIA, Dec 11 (Reuters) - Grain processor Bunge Ltd (BG.N) and Japanese trading house Itochu Corp (8001.T) said on Thursday they will build a sugar cane mill in Brazil's Tocantins state.

The mill will have a capacity to process 1.4 million tonnes of sugar cane per year and will begin operating in 2010, the companies said in a joint statement.

The capacity of the plant that will produce sugar, ethanol, and electric energy could increase to 4.4 million tonnes.

Bunge will contribute 80 percent of the investment, with Itochu carrying the difference.

Both companies are already partners in a separate mill in the central Minas Gerais state. They said in September that they would invest $800 million in both projects.

Full capacity of both mills should be reached in 4 years, the companies said. (Reporting by Roberto Samora; Writing by Raymond Colitt; editing by Carol Bishopric and Andre Grenon)