REFILE-UPDATE 1-Cliffs looks to Asia with Consolidated bid32 minutes ago by Thomson Reuters

(Refiles to correct spelling of Consolidated in headline)

* Consolidated shares up 29.67 pct at C$17.35 on TSX

* Cliffs shares up 3.43 pct at $87.87 on NYSE

* Some analysts see possibility of "premium" offer

* Deal could lead to more Asia business for Cliffs (Recasts, adds details; in U.S. dollars unless noted; )

By Julie Gordon

TORONTO, Jan 12 (Reuters) - Cliffs Natural Resources's <CLF.N> C$4.07 billion ($4.1 billion) acquisition of Canada's Consolidated Thompson <CLM.TO> will give the U.S.-based miner a foot in the door with Chinese buyers, as it looks to boost sales to Asia.

Cleveland, Ohio-based Cliffs said late on Tuesday it would buy Consolidated Thompson Iron Mines in a friendly C$17.25 a share deal.

Montreal-based Consolidated has about 236 million shares outstanding, according to Thomson Reuters data. The deal price, including assumed debt, comes to C$4.9 billion, Cliffs said.

Consolidated's shares were up 29.67 percent at C$17.35 on Wednesday afternoon on the Toronto Stock Exchange, while Cliffs shares rose 3.43 percent to $87.87 on the New York Stock Exchange.

Iron ore, a key ingredient in steelmaking, is in high demand as the urban populations of countries like China and India grow at a rapid pace. boosting demand for steel in high-rise construction and other industries.

Consolidated has offtake agreements with three Asian parties for its current annual production of about 8 million tonnes from its Bloom Lake mine. The miner also has plans to expand production to 16 million tonnes of a year by late 2012.

Bloom Lake, which went into production in 2010, is located next to Cliffs' Wabush facilities in the prolific Labrador Trough iron-mining region of Eastern Canada.

"We believe Cliffs is positioned to maximize potential synergies from this deal, given its adjacent port and loading facilities," said RBC Capital Markets analyst Robin Kozar in a note to clients.

Kozar said that Cliffs is paying $2.90 per tonne of iron ore for Consolidated, versus the average deal price in the sector of 90 cents a tonne. Iron ore prices are currently above $175 a tonne and are expected to stay near historic highs in the near term.

But the real benefit for Cliffs, an iron ore and coal miner, is Consolidated's sales contracts with buyers in China and Korea.

ASIAN MARKET

Consolidated's largest shareholder is Wuhan Iron and Steel of China, which has an offtake agreement with the Canadian miner for 4 million tonnes a year for the life of the Bloom Lake mine.

The Chinese company is backing the deal with Cliffs, and analysts say the arrangement will likely lead to further sales agreements for Cliffs' pellet and concentrate products.

Consolidated also has offtake agreements with Chinese-based trader Worldlink and Korea's SK Networks.

Jennings Capital analyst Peter Campbell said he was surprised by news of the Cliffs-Consolidated deal.

"Consolidated Thompson has always acted and behaved and communicated to the Street that they were going to be the consolidators in Labrador City," Campbell said. "And it turned out that they were the consolidatee."

He noted that while the bid was "fair" it was below his target price of C$18.50 for the miner, and suggested there might still be room for a rival "premium" bid from another player.

The Labrador Trough, which extends from the province of Quebec into the neighboring province of Newfoundland and Labrador, is also mined by Rio Tinto-backed <RIO.AX> Iron Ore Company of Canada and ArcelorMittal <ISPA.AS>.