The governor of Madang, Peter Yama, says a slurry spillage from the Ramu nickel mine is the worst environmental disaster in Papua New Guinea.
This came after a spill into a creek turned the sea red which is a threat to marine life as well as local villagers.
The Post Courier reported Mr Yama has called on the government to immediately close down the Chinese government-owned and operated Ramu nickel project because of its poor environmental record.
He said the company is operating illegally anyway, because its mining agreement expired in April this year.
Mr Yama also pointed out the company had had a 10-year tax holiday, made billions in profits and paid very little to his people.
He said the only reward the company has given the people in the Basamuk Bay is the reckless spillage of highly toxic waste in the sea.