(Reuters) -The Canadian government has rejected Shandong Gold Mining's bid to acquire Canada's TMAC Resources, the companies said, with the Chinese miner adding that the sale was blocked on national security grounds.
As the COVID-19 pandemic has caused economic dislocation, countries from Australia to Canada have increased scrutiny on deals by state-run Chinese miners this year.
In a filing to the Shanghai Stock Exchange on Tuesday, Shandong Gold, one of China's biggest gold miners, said it had received notice of a decision by Canadian authorities on Dec. 18 that it should not proceed with the deal.
In its own filing late on Monday, TMAC also said it been informed of such an order under the Investment Canada Act.
Shandong Gold said in May it would pay C$230 million ($179 million) to acquire TMAC, which operates the Hope Bay mine in the northern and strategically important territory of Nunavut.
Canada in October launched a national security review of the proposed acquisition that was extended last month..
The last major Chinese acquisition blocked by Canada was a proposed C$1.51 billion takeover of construction company Aecon by China Communications Construction Co Ltd, also on national security grounds, in May 2018.
Bilateral relations have been fraught since Canada's December 2018 arrest of Huawei Technologies Co Ltd Chief Financial Officer Meng Wanzhou at the request of the United States.
Canada's department of Innovation, Science and Economic Development, which oversees foreign investment, did not immediately respond to a request for comment.
($1 = 1.2865 Canadian dollars)