UPDATE 1-China's MMG confirms in talks to buy Glencore's Peru copper mine

* Las Bambas acquisition would be China’s biggest mine deal

* Mine still needs $2.4 bln in capital spending (Adds details)

MELBOURNE, March 19 (Reuters) - China’s MMG Ltd confirmed on Wednesday it was in talks with Glencore Xstrata to buy the Las Bambas copper mine in Peru, an acquisition expected to cost more than $5 billion, but said there was no guarantee a deal would be agreed.

MMG, the Australia-based offshore arm of Chinese state-owned Minmetals, said it was bidding alongside China state-owned giant CITIC Group and Hong Kong-registered Guoxin International Investment Corp.

“No binding agreement has been reached in connection with the acquisition as of the date of this announcement,” MMG said in a statement on Wednesday to the Hong Kong stock exchange.

Sources told Reuters on Monday that the Chinese consortium’s representatives were set to meet with a Glencore delegation in London, and an agreement could be reached as soon as this week.

Swiss-based Glencore was required to sell Las Bambas to win approval from Beijing for its $46 billion takeover of Xstrata last year, as China, the world’s biggest copper user, feared the merged heavyweight would have too much control over the metal.

If the long-awaited deal goes through, it would be China’s biggest mine acquisition worldwide and would help satisfy the country’s hunger for the metal used in everything electrical and in plumbing as its cities rapidly expand.

The acquisition would be key to meeting MMG’s target of becoming a top mid-tier diversified miner within the next few years.

Las Bambas is expected to produce around 450,000 tonnes of copper a year for the first five years. By comparison, MMG last year produced 188,000 tonnes of copper from its mines in Australia, Laos and the Democratic Republic of Congo.

Glencore spent $1.7 billion on construction at Las Bambas in 2013 and has forecast a further $2.4 billion would need to be spent ahead of first production in the second half of 2015.

Reporting by Sonali Paul; Editing by Stephen Coates and Richard Pullin