Costa Rica said on Monday that an international tribunal had ruled in its favor in a dispute with Canadian mining company Infinito Gold over the 2010 cancellation of a gold concession on environmental grounds.

"The government of the republic is pleased to inform the country that Costa Rica has won the case brought by Infinito Gold," the presidency said in a statement.

The company had taken the case to the Washington-based World Bank's International Centre for Settlement of Investment Disputes claiming nearly $400 million in compensation from Costa Rica for the cancellation of the mining contract at Crucitas in Cutris de San Carlos near the border with Nicaragua.

The "tribunal concluded that it was inappropriate to award damages to Infinito Gold Ltda," noted the presidency.

The Costa Rican Congress banned open-pit mining at Crucitas in 2010 shortly after a local court cancelled Infinito Gold's contract.

The contract was awarded in 2008 by former president and Nobel Peace Prize winner Oscar Arias.

It would have allowed mining on a 261-hectare piece of land which includes 191 hectares of primary forest -- the last in the country -- which would have been felled.

But in 2010, after intense lobbying by environmentalists and politicians, a court voided the permit citing environmental concerns and irregularities in granting of the permit.

In the meantime, "illegal miners, mostly of Nicaraguan nationality, have been extracting gold" from the area, the presidency said.

Environmental groups said the illegal miners who extract the gold using dangerous chemicals such as mercury and cyanide.

The presidency said a "special police operation" would be launched beginning Tuesday to crack down on the illegal mining.