(Reuters) - China-backed coal miner Yancoal Australia Ltd (>> Yancoal Australia Ltd) said on Wednesday it had exercised its option to buy a 29 percent stake in the Warkworth operation from Japan's Mitsubishi Corp (>> Mitsubishi Corp) for $230 million(171.07 million pounds).

The agreement brings Yancoal's stake in the Warkworth project to about 85 percent, it said in a statement.

The project, which was part of a bidding war between Yancoal and commodity trader Glencore PLC (>> Glencore), was snatched up by Yancoal earlier this year as part of its acquisition of Rio Tinto's (>> Rio Tinto Limited) Coal & Allied unit.

(Reporting by Ambar Warrick in Bengaluru; Editing by Byron Kaye and James Dalgleish)