By Neha Arora

NEW DELHI (Reuters) - India's JSW Steel Ltd is in talks with Australian miner Whitehaven Coal for a stake in its Blackwater metallurgical coal mine, a source aware of the discussions said on Tuesday. JSW Steel, India's largest steel producer by capacity, is conducting due diligence and expects to get a coking coal sample from the mine this month to check specifications, the source said. Whitehaven in January said it was exploring a potential sell-down of about 20% of Blackwater to global steel producers as strategic joint venture partners.

The miner acquired the Blackwater and Daunia mines from BHP Group in a $4.1 billion deal last October, and expects the acquisition to complete in early April.

JSW Steel could consider acquiring more than a 20% stake in Blackwater, the source said.

JSW has held initial talks with Blackwater but has yet to see the specifications of the coking coal from the metallurgical coal mine in Australia, the source said.

A spokeperson for Whitehaven declined to comment on any talks with JSW Steel but referenced mention of the joint venture sell-down in the company's earlier statements. A JSW Steel spokesperson declined comment. JSW Steel has been scouting for coking coal assets overseas.

The company currently imports coking coal from Canada, Australia, the United States, and some grades from Russia. Last year, JSW Steel was in talks with Canada's Teck Resources for a stake in its coking coal unit but eventually a Glencore-led consortium agreed to buy it for $9 billion.

Coking coal is emerging as a top option for companies to make a foray into, as it is used to make steel, an important component in large infrastructure and renewable projects.

India was planning to form a consortium of state-owned companies to facilitate coking coal imports to help domestic steel companies tide over shortages, Reuters reported last month.

Indian steel companies consume around 70 million metric tons of coking coal annually, and imports constitute around 85% of the country's total requirement.

(Reporting by Neha Arora; Additional reporting by Melanie Burton in Melbourne; Editing by Mayank Bhardwaj and Christina Fincher)