* Glencore's share price eases, Rio's rises
* Glencore says offer is at least $225 million higher
* Rio no immediate comment (Adds Rio statement, updates share price)
By Rahul B and Barbara Lewis
June 23 (Reuters) - Miner and trader Glencore on Friday hit back with an increased offer of $2.675 billion in cash to buy Australian coal assets from Rio Tinto that earlier this week said it was favouring a Chinese bid.
On Tuesday, Rio Tinto said it had selected Yancoal to buy its Coal & Allied division in Australia for $2.45 billion.
That was $100 million lower than a previous counter-bid from Glencore, but Rio said it believed Yancoal's offer could be completed more quickly because it had regulatory approvals.
Glencore said its latest offer, which includes a coal-linked royalty, was at least $225 million greater than Yancoal's proposal and it would pay the cash amount in full on completion with no deferred payments.
"We believe the Glencore offer satisfies the criteria for a 'superior proposal': it delivers substantially greater value to Rio Tinto shareholders and low deal completion risk," Glencore said in a statement.
Rio Tinto confirmed it had received the new offer and said it would give it "appropriate consideration".
Depending on whether it accepts Glencore's revised offer, it said it would adjourn an annual general meeting scheduled for Tuesday and allow Yancoal two days to pursue a counter offer.
Glencore shares closed 0.8 percent lower, while London-listed shares in Rio rose 0.5 percent.
Although subject to a limited number of regulatory approvals, Glencore said it was demonstrating its confidence it would get them with a $225 million deposit, which it will forfeit if the transaction does not go ahead.
It has said it already has approval from Japan where the majority of the coal would be shipped.
Glencore reiterated an earlier pledge it would ensure its net debt to EBITDA ratio was no greater than 2:1 by selling some assets should it complete the deal.
It also said the offer would automatically lapse if Rio Tinto did not declare it to be the superior offer on June 26 and subsequently if a binding sales agreement is not clinched on July 5.
Glencore has long sought to own Rio's Hunter Valley coal assets, which adjoin mines it already has, offering the possibility for synergies and blending coal to optimise value.
Analysts say Rio has deep ties with China, the world's biggest commodity market, which it will not wish to damage, but Glencore's offer is clearly higher.
"We have to see if Yancoal will lift its bid but otherwise it is hard to see Rio reject Glencore’s revised offer," Hunter Hillcoat, analyst at Investec, said. (Editing by Alison Williams and David Evans)