WASHINGTON — A company controlled by the Chinese government has withdrawn its bid to buy majority control of a small Nevada gold mining operation after Obama administration officials, pointing to a nearby Navy air station, raised national security concerns about the deal.

The decision by the company, Northwest Nonferrous International Investment Company, averts a showdown over its proposed $26 million purchase of a 51 percent stake in the Firstgold Corporation.

The Treasury Department was prepared on Monday to recommend that President Obama block the sale.

“It is disappointing,” Firstgold’s chief executive, Terrence Lynch, said on Monday. “It means the whole deal is over.”

Officials at the Treasury Department, which oversees the review panel known formally as the Committee on Foreign Investment in the United States, did not disclose the reason for their concerns. The panel examines deals by foreigners trying to acquire critical American assets.

But in meetings with Firstgold executives, Treasury officials repeatedly cited the proximity of Firstgold’s four Nevada properties to the Fallon Naval Air Station, as well as “other sensitive and classified security and military assets that cannot be identified,” according to a written summary of briefings prepared by a company lawyer.

The Navy site is a major training facility where pilots test laser-guided weapons. Federal lands in Nevada historically have also been one of the most popular sites for American nuclear missile silos.

Joel O. Benson, a lawyer for Northwest Nonferrous, raised questions about future investment by foreign-controlled companies in the mining industry in the United States, particularly Nevada, where much of the land is federally owned.

The concerns of the Obama administration also apparently involved unease over what the Chinese company might try to extract from the property, which is mostly on federally leased land. Firstgold told officials that it had permission to mine for a variety of minerals, including zinc and uranium.

Mark A. Smith, chief executive at Molycorp Minerals, a company based in Colorado that specializes in so-called rare earth metals, said the move suggested that tension with China over the global supply of certain minerals played a part in the decision.

Northwest Nonferrous, a company with more than 6,000 employees, is making a global effort to expand its supply of precious metals, with recent purchases or deals in Canada and Australia. The Nevada deal would have been its first in the United States.

American officials last month filed a challenge with the World Trade Organization protesting restrictions that China has imposed on exporting raw materials extracted from its own mines.

Mr. Smith said an additional concern was Chinese domination of rare earth elements. Such metals are most likely not present on the property in sufficient quantities to mine commercially, but the action sends a message, he said.

http://www.nytimes.com/2009/12/22/business/global/22invest.html