* Deal follows bidding war
* Glencore (LON:GLEN) also seeking Mitsubishi stake (Updates with Yancoal announcement)
By James Regan and Barbara Lewis
SYDNEY/LONDON, July 27 (Reuters) - Glencore on Thursday bought a 16.6 percent stake in assets in Hunter Valley, Australia, for $429 million from China's Yancoal YAL.AX , gaining some of the coal operations it had sought in a bidding war which Yancoal won.
Rio Tinto RIO.AX RIO.L last month confirmed Yancoal Australia was the preferred bidder for its Australian Coal & Allied unit after the company added an 11th-hour sweetener. on Wednesday, Yancoal's Chinese parent company Yanzhou 1171.HK said its board had approved the transfer of a 16.6 percent interest in the HVO (Hunter Valley Operations) joint venture to a "third party".
An announcement in Hong Kong on Thursday confirmed Glencore was the buyer in a deal contingent on the completion of the Rio sale.
HVO is 67.6 percent held by Coal & Allied and 32.4 percent by Mitsubishi Corp 8058.T . Glencore said on Thursday it and Yancoal would work together to acquire Mitsubishi's stake. would give Glencore a total of 49 percent of HVO which is widely regarded as the more valuable of the two Hunter Valley coal complexes that Yancoal is set to acquire from Rio.
Glencore has long wanted the assets that adjoin operations it already owns. Analysts said it aimed to blend the Rio Tinto coal with coal from its existing operations to custom-tailor shipments to power-generating customers in Japan, South Korea and Taiwan.
Glencore is already the world's largest exporter of sea-traded thermal coal, with interests in 28 mines in Australia, Colombia and South Africa.
It first tried to acquire Coal & Allied in 2015, when Rio Tinto made it clear that coal was no longer part of its growth strategy.