MEXICO CITY (AP) — Panama’s president announced Thursday that the government ordered the local subsidiary of a Canadian mining company to cease operations at its huge open pit copper mine after it failed to sign a new contract outlining substantially higher payments to the government.

Minera Panama, a subsidiary of Canada’s First Quantum Minerals Ltd., is the largest private investment in the history of Panama, employs thousands and accounts directly and indirectly for some 3% of Panama’s gross domestic product.

President Laurentino Cortizo’s Cabinet voted Thursday to order the mine to halt operations, according to a government statement. The Labor Ministry was instructed to take steps that would guarantee employment and labor protections for the mine’s workers.

Cortizo later announced the decision in a televised address.

The government’s move came after Minera Panama failed to meet commitments agreed to in January for a new contract that was “reasonable and satisfactory” for the Panamanian people, the statement said.

The government has said that on Jan. 17, Minera Panama agreed in a letter to a deal with the government that included a minimum annual payment of $375 million. Despite negotiations, the company did not sign the new contract by the Dec. 14 deadline set by the government.

Neither Minera Panama nor First Quantum responded to requests for comment.

But earlier Thursday, before Cortizo's announcement, First Quantum said in a statement that its latest proposal “would make Cobre Panama one of the highest payers of royalties and taxes amongst the large copper producing mines in the Americas.”

It said the proposal incorporated the agreements made earlier this year, “including a contribution of $375 million in benefits per year with mutually agreed protections.”

The company said “necessary legal protections on termination, stability and transition arrangements could not be agreed upon.”