UPDATE 1-Waratah accepts richer C$103 mln Mineralogy bid

(In U.S. dollars, unless noted)

TORONTO, Dec 1 (Reuters) - Waratah Coal WCI.V said on Monday it has accepted a sweetened C$103 million ($83 million) takeover bid from Mineralogy Pty Ltd, which will give the privately-held suitor control of the stalled Galilee Basin coal project in western Australia.

The offer sent shares of Canadian-listed Waratah up 20 percent, or 25 Canadian cents, to C$1.50 early in the TSX Venture Exchange session.

Mineralogy, which is backed by Australian billionaire Clive Palmer, already owns about 14 percent of Canadian-listed Waratah on a fully-diluted basis, and will pay C$1.60 a share for the remainder.

The offer is up from an initial partial bid of C$1.41 a share announced in early October, and represents a 28 percent premium over Friday's closing price of C$1.25.

Waratah has been seeking a partner for the $3.4 billion Galilee project, but had said Mineralogy's original offer -- a partial bid which would have given Mineralogy 50.1 percent of the company -- undervalued the shares.

In a statement, Waratah said the revised offer "is fair from a financial point of view to Waratah's shareholders and is in the best interest of the company and its shareholders."

Waratah's shares dropped 45 percent in early September, when Australia blocked development of a rail line and coal port for the Galilee Basin project, which would be expected to produce 25 million tonnes of thermal coal a year.

The company is looking at an alternative site for the rail line and port.

($1=$1.24 Canadian) (Reporting by Cameron French; Editing by Jeffrey Jones)