Papua New Guinea has refused an application to extend mining at Barrick Gold's Porgera gold mine, Prime Minister James Marape said on Friday.
The decision, which would have extended by 20 years Barrick's rights, was based on the recommendation of the country's mining advisory committee, Marape said in a statement.
"In the best interests of the state, especially in lieu of the environmental damages, claims and resettlement issues, the Special Mining Lease will not be renewed," he said.
Barrick had been set to elevate the troubled mine to its top-tier assets, despite landowner and government demands to cede a larger stake and deteriorating security at the joint venture with China's Zijin Mining.
With a 20-year lease renewal application in the balance, Barrick has faced backlash from Papua New Guinea landowners and residents.
Critics say the Porgera mine has polluted the water supply and created other environmental and social problems, with minimal economic returns for locals.
Marape said that plans were to bring the mine into state control, without giving any financial details over how much the State might pay for it.
"Once the transition phase has been completed, then the state will enter into owning and operating the mine after transition arrangements," he said in a televised speech from the capital Port Moresby.
The manager of Barrick's joint venture, Barrick (Niugini), could not immediately be reached for comment.
Several other resources companies are waiting on government approval for new projects, including Australia's Newcrest for its Wafi Golpu gold and copper project.
In the statement, Marape said PNG was "moving to progress" Wafi Golpu as well as P'ynang, which will feed Exxon Mobil Corp's PNG LNG plant and Total's Papua LNG as its three priority projects.