(Bloomberg) -- Canada rejected a plan by China’s Shandong Gold Mining Co. to acquire TMAC Resources Inc., which runs a mine in the country’s Arctic region, on security grounds.

Toronto-based TMAC owns the Hope Bay gold mine in the northern territory of Nunavut, an operation that includes a port and air strips. Shandong, an acquisitive state-backed metal producer, agreed to buy the company for about $150 million in May, but in October TMAC said it had received notice that the Canadian government had ordered a national security review.

Late Monday, TMAC said the government issued an order under the Investment Canada Act for Shandong not to proceed with the acquisition. The Canadian miner didn’t provide reasons for the rejection. Shandong confirmed the rejection in a statement on Tuesday, citing a decision made for the “purpose of safeguarding national security.”

Officials in Prime Minister Justin Trudeau’s office, the federal industry ministry and the Chinese embassy in Ottawa didn’t immediately respond to requests for comment.

Security observers have said a sale could be a threat to Canada because it would give China greater access to the Arctic’s Northwest Passage and is close to Canadian early warning radar facilities.

Canada-China relations have been frayed since December 2018, when Huawei Technologies Co.’s chief financial officer, Meng Wanzhou, was detained in Vancouver at the request of the U.S., where she’s charged with fraud. She has been confined to the city since then.

Following her arrest, China jailed two Canadians -- Michael Spavor and Michael Kovrig -- on espionage charges and halted billions of dollars in Canadian imports.

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