DEALTALK-Race for Australian mine assets gets crowded

* Some caution amid potential debt crunch

* Japan, S.Korea, United States hunting vs China

* Aston-Whitehaven, Atlas, Paladin tipped as targets

* Australian juniors with African assets seen attractive

By Sonali Paul and Narayanan Somasundaram

MELBOURNE/SYDNEY, Jan 17 (Reuters) - Asian and U.S. companies racing to snap up coal, iron ore and uranium assets to meet booming demand for power and steel making will give dominant Chinese buyers a run for their money in what's likely to be another bumper year for Australian mining M&A.

Frozen credit markets and a slowing Chinese economy may check Beijing's buying spree, but there are Japanese, South Korean and U.S. companies, and cashed-up global miners, ready to bet on Australian minerals.

Coal is likely to be the No.1 target, as well as firms that have port access and resources in Africa, where assets are of high quality and cheaper to develop.

That puts companies such as Atlas Iron, a merged Aston Resources -Whitehaven, and uranium miner Paladin Energy in the spotlight. Other potential targets are coal miner Bathurst, with assets in New Zealand, and gold miners Perseus Mining and Regis Resources, bankers and analysts said.

State-run Chinese firms will likely run up against firms such as Xstrata, Japan's Mitsubishi Corp, South Korea's POSCO and U.S- based Alpha Natural Resources in chasing those assets, bankers and analysts say.

"We expect to see appetite from Japanese, U.S. and Chinese companies for Australian mining assets," said David Wood, resources banker at Bank of America Merrill Lynch, who advised Peabody and China's Hanlong in Australian acquisitions last year.

"A number of U.S. companies are interested in investing in high-margin assets with a strong operational track record. Australia remains an attractive investment destination."

BHP Billiton and Rio Tinto are expected to have combined earnings of some $55 billion, putting them in a strong position to compete for assets.

Australia was a standout last year, with a 12 percent rise in M&A activity to $173 billion against a 12 percent drop for Asia, according to Thomson Reuters data. Resource deals made up 44 percent of all Australian inbound deals.

Australia's stubbornly high dollar, trading near parity with the U.S. dollar, has not put off offshore buyers as it has been offset by the battering that miners' shares have suffered due to worries over global growth.

The metals and mining index slid 28 percent last year, nearly twice as much as the broader market.

"The market has a myopic view, but some of these corporates and customers are more likely to take a long term view and take advantage of these beaten up prices," said Prasad Patkar, a portfolio manager at Platypus Asset Management.

Three deals announced late last year - the auction of A$5 billion ($5.1 billion) coal miner New Hope Corp, Yanzhou Coal Mining Co's bid to merge with Gloucester Coal, and Whitehaven's A$2.7 billion bid for Aston - will set the pace for the first half of this year.

And bankers don't rule out rival bids for Gloucester and Aston, in a sign of heightened interest for quality assets.

"Despite some concern about the Chinese economy, the Chinese and Indians, amongst others, are still very interested, particularly in coal assets on the east coast of Australia," said John Tivey, lead partner on mining at law firm Freehills.

Indian companies have built a reputation for tyre-kicking, with only a few, like GVK Power & Infrastructure, able to clinch deals.

CASH IS KING

At the same time, tough credit markets mean some smaller Australian miners are struggling to line up debt to fund projects, so they are looking for partners or suitors with cash.

"There are pockets of substantial cash out there waiting to be deployed. This, coupled with volatile equity valuations and more challenging funding for targets can open up deal flow," said Merrill's Wood.

Bankers and lawyers expect Japanese and South Korean firms to feature in more deals as they look to secure resources before China ties them all up.

"They've seen how successful the Chinese have been, in particular around not just being minority investors with offtake agreements but seeing the Chinese are taking big chunks of equity," said Freehills' Tivey. "The Koreans and Japanese are back in the market and looking at doing similar deals."

Mitsubishi has started the ball rolling with a bid for its partner Murchison Metals' stakes in the A$3.7 billion Jack Hills iron ore expansion project and the A$5.9 billion Oakajee port and rail project in Western Australia.

Once it takes over the projects, Mitsubishi will look to sell stakes to Chinese and South Korean steelmakers, including POSCO.

Atlas Mining will be on buyers' radar as it expects to double its annual iron ore production in Western Australia's Pilbara region to 12 million tonnes this year, and doesn't need expensive infrastructure as it trucks its ore to port.

The A$2.8 billion company also has a range of undeveloped prospects in Western Australia, following its takeovers of FerrAus and Giralia last year, making it an attractive target.

"We're seeing some pretty significant deals brewing in iron ore, so we think there's going to be some ongoing activity," said Tivey.

GOLD AND URANIUM

Uranium producers and explorers will also remain in the frame following global miner Rio Tinto's recent C$654 million takeover of Canadian prospector Hathor Exploration, and China Guangdong Nuclear Power Corp's (CNGPC) planned A$2.2 billion bid for Extract Resources.

Paladin Energy, producing uranium in Namibia, looks a potentially cheap target as its shares have slumped 70 percent since Japan's Fukushima disaster that sparked worries over nuclear energy demand, and Perseus Mining, worth A$1.3 billion, looks riper for a suitor now that its gold mine in Ghana has begun commercial production.

"We're focused on our projects in Ghana and the Ivory Coast," spokesman Nathan Ryan said, declining to comment on whether the company is likely to be taken over.

Copper miner OZ Minerals could pounce on Sandfire Resources, in which it already owns 19.9 percent. PanAust, with assets in Asia and Chile, or Discovery Metals with an asset in Botswana, would also fit OZ's criteria, JPMorgan's hedge fund sales desk said in a note.

The one disappointment for bankers may be the New Hope auction. While New Hope is attractive as it owns a port for exporting its thermal coal, a sale may be complicated by its majority shareholder's interest.