The steel unit of Industries Qatar has dropped its plans to acquire a stake in a $2.1 billion iron ore project in Mauritania, a company executive said on Sunday.

'The company has withdrawn from the offer to participate and acquire a stake in the Mauritanian project due to internal strategic reasons,' a company executive told Reuters, declining to be identified.

State-controlled Industries Qatar's subsidiary, Qatar Steel Company, said in April it had bought 49.9 per cent of the Al-Qalb Al-Og iron ore venture in northern Mauritania for $375 million in November after larger Gulf rival Saudi Basic Industries Corporation (Sabic) pulled out, saying returns would be too low.

The official said Qatar steel would still hold a 9 per cent stake in Australia's Sphere Investments Limited, which is developing the project with Mauritania's state-owned iron ore firm Societe Nationale Industrielle et Miniere.-Reuters