The Government has knocked back a bid by Hong Kong's Cheung Kong Infrastructure Holdings to buy New Zealand Steel Mining.
Finance Minister Bill English says the bid, worth $252 million, has been rejected because Cheung Kong Infrastructure pulled back its plans to expand the Taharoa Iron Sands operations because of falling global demand.
Mr English says the deal failed to have substantial and identifiable benefits for the country.
New Zealand Steel Mining is a subsidiary of Australia's biggest steel maker, Blue Scope Steel, which announced plans last week to raise up to $A550 million to shore up its balance sheet amid declining sales.
Cheung Kong Infrastructure bought Wellington's electricity lines network for nearly $800 million from Vector earlier this year.