China's Minmetals Resources said it would withdraw a bid for Equinox Minerals of Australia after a Canadian firm topped its offer, ending Beijing's latest move on Australia's mining sector.
Canada's Barrick Gold, the world's biggest gold miner, said Monday it had struck a deal to buy Equinox for Can$7.3 billion ($7.7 billion), well above the $6.5 billion Minmetals offer earlier this month.
Minmetals' bid for Equinox would have seen the biggest Chinese takeover of an Australian resources firm and could have created the 14th largest copper producer in the world.
"While we still consider the Equinox assets provide a good fit with MMR's strategy, the price offered by Barrick is above our most optimistic assessment of value," Minmetals chief executive Andrew Michelmore said.
"Competing with Barrick at these prices would, in our view, be value destructive for MMR's shareholders," he added in a statement to the Hong Kong stock exchange, where Minmetals is listed.
According to Barrick, the Equinox board of directors has "unanimously approved entering into the support agreement" and recommends that Equinox shareholders accept the offer.
Beijing's interest in its mining firms has sparked intense debate in Australia over whether to allow Chinese state-owned entities to increase their control over the country's resources.
Commodity prices have hit record highs over the past few months, fuelled by heavy demand from economic powers China and India and sparking a series of mergers and acquisitions in the industry.