AngloGold, the South African gold mining firm, has given up its attempt to buy Australian rival Normandy Mining.

Its decision, following the failure of its US$2.26bn bid, leaves the field open for Newmont Mining of the US.

AngloGold was offering A$1.99 a share, for a total of A$4.44bn with a substantial cash component.

But Newmont's position has always been stronger, because its offer - of A$4.56bn, or A$2.04 a share - was backed both by Normandy's board and by its biggest shareholder, Franco-Nevada Mining Group.

Franco-Nevada Mining is itself the target of a separate US$2.58bn all-share takeover bid by Newmont.

Single figures

AngloGold had already boosted its offer twice, extending the deadline for Normandy shareholders to signal whether they were prepared to accept its terms.

The three-month bidding war triggered a near-100% rise in Normandy's share price.

But by the closing date on Friday, holders of just 7.1% of Normandy shares had backed AngloGold - short of the 10% figure which, under Australian law, was needed to keep alive the chance of blocking Newmont's campaign.

"It's all over," an Anglogold spokeswoman said. "There is no extension."

Newmont's offer closes in 15 February.

Bigger is cheaper

At the root of both offers is concern among mining corporations at the persistently low price of the prized metal.

The gold price has been steadily falling in value for some years, and consolidation was seen as the way forward.

"The industry is consolidating rapidly, there will be three or four companies that survive and will dominate the industry," Martin Potts, a mining analyst at Williams de Broe told the BBC's World Business Report.

For AngloGold, there was also the perceived need to spread the base of its mining operations out of Africa alone.

Still, the appreciation of Normandy's shares means that the company now looks a little expensive - probably too rich for AngloGold, which recently sold four mines in South Africa's Free State to a local consortium for what some observers considered to be too low a price.

AngloGold runs several joint ventures with Normandy and holds a 7% stake in the company.

It is widely believed AngloGold hopes to trade this stake for Normandy assets if the Newmont deal goes ahead, Mr Potts added.