Wyloo, Noront's top shareholder with a 23% stake as of December, had made a C$133 million ($103.95 million) approach for the miner before BHP lodged a C$325 million competing bid in May.
"Wyloo Metals continues to firmly believe in the immense potential of the Ring of Fire (mineral deposit) and therefore does not intend to support or tender its Noront shares to BHP's offer," it said in a statement.
Noront shares were up 11.5% at 63 Canadian cents, higher than BHP's offer of 55 Canadian cents per share and Wyloo's 32 Canadian cents a share bid.
Wyloo said it would raise the bid if it gets access to due diligence of the Canadian company, whose main asset is the high-grade Eagle's Nest nickel, copper and palladium deposit.
The scramble for Noront underscores the race to secure supplies of battery metals among miners ahead of an expected surge in demand due to the rise of electric vehicles.
Wyloo said any sweetened offer that it would make would include the C$13 million break fee payable to BHP from Noront.
(Reporting by Arunima Kumar in Bengaluru; Editing by Aditya Soni)
