AMLO seeks to definitively close Vulcan's limestone mine

Despite opposition from Washington, Mexico's President Andrés Manuel López Obrador intends to permanently close the limestone quarry US company Vulcan Materials owns in Quintana Roo before his term ends on October 1.

López Obrador acknowledged that his administration did not reach an agreement with the company regarding the SAC TUN mine (formerly Calica), near the beach resort of Playa del Carmen, from where it exported to the US.

"We did everything to reach an agreement with the owners of Vulcan. They are not well advised, I believe that they are affected by having Mexican lawyers who are very accustomed to transaction and they are thinking that they can, once we are no longer [in power], recover their rights, when the destruction of the territory is at stake," López Obrador said during his daily press conference on Tuesday.

“There is already a closure, yes, but I want it to be a definitive closure because they have caused a lot of damage,” López Obrador added.

In May, US Secretary of State Antony Blinken told a Senate Foreign Relations Committee hearing that he warned Mexican authorities that a possible expropriation of Vulcan's land would affect foreign direct investment, amid growing bilateral tensions over the future of the Virginia-based company's limestone quarry and deepwater port.

Previously, senator Tim Kaine (D-VA) told Blinken that López Obrador has tried to expropriate the Punta Venado port and land on two occasions, which is why he requested intervention in the case.

In a press release, Vulcan Materials announced its definitive rejection of a purchase offer for the Calica mine, considering that the government's proposal substantially undervalued its limestone assets and the Punta Venado port.

But if the case goes to trial, “the government of Mexico is going to win, the government of Mexico has to win in arbitration because there is no way they are going to support the ecocide that has been committed in that area. Afterwards they talk demagogically about facing climate change and everything.”

In arbitration handled by the World Bank's International Centre for Settlement of Investment Disputes, the company is seeking more than US$1.5 billion in compensation, with a resolution scheduled for August.

López Obrador clarified that his administration will not opt for expropriation. “The law will only be applied so that the territory does not continue to be destroyed. It is a closure of a mine that destroys our territory, that is, it is not expropriation, just that they cannot remove material from Calica, that is all.”

Vulcan's operation in Mexico has been stopped since May 2022, when López Obrador ordered the immediate closure of the company's quarries, claiming subsidiary SAC TUN was illegally extracting and exporting limestone, which Vulcan has denied and said it has the permits to operate.