* Las Bambas mine expected to fetch $5-6 billion

* Sale would increase shareholder return expectations

* Minmetals bidding with Citic and Guoxin

By Anjuli Davies

LONDON, March 17 (Reuters) - Glencore Xstrata could reach an agreement as soon as this week over the sale of its large Peruvian copper mine Las Bambas to a Chinese consortium led by Minmetals, two sources with knowledge of the situation said.

A sale of Las Bambas, which would be one of China's largest acquisitions of a mining asset in years, would raise hopes that Swiss-based Glencore will return cash to shareholders via a share buyback or special dividend.

Commodities trader Glencore agreed last year to sell Las Bambas to secure approval from competition authorities in top metals consumer China for its $46 billion takeover of mining company Xstrata.

The London-listed group said this month that it had chosen a consortium led by Minmetals as its preferred bidder for the copper project, but the two parties have failed to agree a price.

Representatives of the Chinese consortium are flying to London for talks with a Glencore delegation, the first source said, and an agreement could be reached as soon as this week.

The gap in price expectations has narrowed in recent weeks, the source added.

Glencore declined to comment on negotiations and Minmetals was not immediately available to comment outside Chinese business hours, though banking and industry sources said that Las Bambas could fetch between $5 billion and $6 billion.

GETTING CLOSER

The sale, initially expected to be concluded by the end of 2013, was delayed first by some bidders requests for further due diligence and then by disagreement on price with Minmetals.

MMG, the Hong Kong-listed offshore arm of China Minmetals Corp, is bidding alongside two other Chinese companies: investment business Citic and natural resources and infrastructure group Guoxin, sources said.

Other companies interested in Las Bambas were China's largest aluminium producer Chinalco and a Western consortium that included miners Teck Resources, Newmont Mining and private equity firm Blackstone Group .

Glencore said this month that it would use the proceeds from the sale of Las Bambas to repay debt, invest in new assets and return cash to shareholders.

Analysts said the sale would make it more likely that Glencore will be one the first large miners to return extra cash to shareholders through a share buyback or special dividend.

Global miner BHP Billiton in February hinted that it may launch a share buyback as early as August.