The deal was first announced in 2011, but campaign groups including Greenpeace backed local opposition to the project.
The protesters said mining at the Famatina mountain would require a million litres of water a day.
They also expressed fears over the use of cyanide to extract precious metals.
La Rioja's regional governor, Luis Beder Herrera, said "constant episodes of confrontation" had made it impossible to start the project.
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