"[Chinese mining company] ARC has been involved in the illegal digging and mining for minerals in the Simodi mountain range in Somalia's Awdal region," the government said in a statement.
It added: "These activities violate Somalia's territorial integrity and national sovereignty."
The statement called on the company to "cease its activities responsibly and immediately."
"ARC's activities are not only a violation of Somali laws related to the extraction of natural resources, but also a violation of Somalia's immigration laws, as Chinese nationals are in Somalia illegally where they are conducting activities without work permits," the government asserted.
The government went on to say that the Chinese company had caused "civil turmoil and tension" in its area of operation after introducing "an armed militia to protect its illegally obtained mining acreage."
It also accused the firm of displacing native inhabitants, destroying private property, and harming the local environment.
Somalia's Awdal region is rich in minerals and petroleum and has therefore attracted several international mining firms. Some of these companies, however, are said to be operating on invalid agreements and contracts.
Somali Foreign Minister Abdirahman Duale has already met with Chinese Ambassador Wei Hongtiang to discuss the issue.
Northern Somalia contains numerous deposits of gemstones, natural gas, uranium, tin, iron and petroleum.