Miner Grupo Mexico ups offer to $3.1 bln for Asarco

MEXICO CITY, June 24 (Reuters) - Grupo Mexico increased its offer to retake control of its bankrupt U.S. subsidiary Asarco, proposing $3.1 billion in cash and notes for the Arizona-based copper miner, a Grupo Mexico lawyer said on Wednesday.

Grupo Mexico in a court filing on Tuesday increased its cash offer to $1.46 billion, up from $1.3 billion previously, and increased a note to cover asbestos clean-up claims to $280 million from $250 million, Jorge Lazalde told Reuters.

Combined with $1.4 billion Asarco has in cash, the total offer stands at around $3.1 billion, he said.

The revised offer was made as a response to a rival bid from Indian company Sterlite Industries (STRL.BO), a subsidiary of London-listed mining conglomerate Vedanta Resources PLC (VED.L).

Last week, Sterlite upped the note portion of its bid for Asarco -- valued at between $2 billion and $3 billion including liabilities, an increase from a previous offer of $1.7 billion in cash and notes.

"We didn't know that Sterlite was going to increase its offer. When they announced it ... we went to work on our counter offer," he said.

Asarco filed for bankruptcy in 2005 amid more than $1 billion in environmental damage and asbestos claims and Grupo Mexico lost control of the company's board due to the bankruptcy.

Investment fund Harbinger Capital Partners, one of Asarco's largest bondholders unsatisfied with both the offers from Grupo Mexico and Sterlite, joined the battle last month for the struggling copper miner with its own $500 million reorganization bid. (Reporting by Mica Rosenberg; Editing by Gary Hill)