Te Arawa has decided not to bid for the closed Rotorua sawmill, Tachikawa, because it would cost about $25 million to buy and run.
The company went in to receivership in October, with 120 employees - most of them Maori - losing their jobs.
It prompted a Te Arawa collective to consider putting up a bid to retain jobs and to reclaim tribal land.
Te Arawa Federation of Maori Authorities deputy chair Te Taru White, who's been leading the idea, says he's disappointed it could not put up a bid, but it wasn't sustainable for the collective to make an offer.
He says the tribal collective estimated it would cost about $25 million to purchase and operate the mill.
Mr White says it needed to take account of a volatile exchange rate, a fluctuating market and a competitive industry.
He says it considered bidding for the land, but according to its estimations, it would be too expensive at about $3 million.