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The land where a mine owned by US construction company Vulcan Materials is located in Mexico will become a nature reserve by decree if the firm does not accept the government’s offer to buy the company out, Mexican President Andres Manuel Lopez Obrador said on Friday.
The president has long accused Vulcan, which extracts limestone in southern Mexico, of environmental damage, which the company denies.
Lopez Obrador’s decision would be the latest in a string of government actions that have affected businesses in Mexico. Earlier this year, the state took over a section of train track operated by rail giant Grupo Mexico, only later signing an agreement with the firm.
“If there’s no answer from (Vulcan), if they don’t want to help, that will be the decision,” Lopez Obrador said in a regular press conference. “It will simply be declared a nature reserve by decree.”
The president added that Mexico was offering 6 billion pesos ($328.32 million) to 7 billion pesos ($383.04 million) for the land based on a government evaluation.
Vulcan, in letters to ambassadors of both the United States and Mexico, called the appraisal “inadequate,” according to a Bloomberg report earlier this week.
The company did not immediately respond to a request for comment.
The land, which spans some 2,400 hectares (5,930 acres), includes the Sac Tun limestone quarry, as well as the Punta Venado port. The president has pitched turning some of the space into a tourist destination, with cabins-for-rent and docking for cruise ships.
“How are we going to pay more?” asked Lopez Obrador. “That would be an act of corruption.”
Vulcan filed a complaint with the World Bank arbitration tribunal, the ICSID, in 2018 over a disagreement with the previous government. But after Mexican officials shuttered Vulcan’s facilities, the company has demanded more than $1.5 billion in compensation through the tribunal.
The tribunal has handled trade disputes under the North American Free Trade Agreement (NAFTA), which was replaced in 2020 by the USMCA trade pact.
“They say they’re going to resort to the free trade agreement,” Lopez Obrador said. “They make it known that they’re being threatened. No, it’s not a threat, it harms the environment.”
($1 = 18.2750 Mexican pesos)
(By Raul Cortes and Kylie Madry; Editing by Isabel Woodford and Jonathan Oatis)
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