Thai villagers on Wednesday celebrated a junta move to shutter a controversial gold mine, a rare blow to big business in a kingdom where environmental concerns are often secondary to profit-making.

The Chatree mine complex straddles three provinces in northern Thailand and has been dogged by a decade of protests from locals who say its has contaminated crops and livestock.

Thailand's military government said Tuesday it would shut down the quarry and stop handing out new gold mining licenses across the entire kingdom to "heal rifts" sparked by the industry.

"I am so happy as I fought for over 10 years," said Tanyarat Sintontammatad, the 39-year-old leader of an anti-mine group in the northeast.

"But this is not a ultimate victory yet," she added. "I am still concerned about people's health and environmental damage in the area."

Thailand's industry minister said an official inquiry could not conclusively link the villagers' health complaints to the mine, but recommended it be shut for the "benefit of society".

The mine is owned by Akara Resources, a Thai subsidy of an Australian firm.

The government says it will oversee its closure by the end of the year and contribute funds to compensate the company's hundreds of workers.

Arom Khamchring, a nurse who became a leading anti-mine activist in Phitsanulok province after locals started falling ill, welcomed the ruling but raised concern that the moratorium could be overturned by a new government.

"We agree with the decision and view it is a good sign that the Cabinet believes mining has damaged our natural resources," she told AFP.

The order marks a rare concession to environmental activists in Thailand, who often lose out to business interests in a country where government deals are frequently greased by corruption.

Thailand's junta, which came to power in a 2014 coup, has come under fire for using special powers to fast-track the construction of power plants and other projects.

Gas drilling across the northeast has also stirred opposition and health complaints in recent years, despite a junta ban on protests.