Vulcan refutes grounds for possible expropriation of Mexico land

US company Vulcan Materials blasted the Mexican government’s threats to expropriate its land in Quintana Roo state.

According to a release cited by media reports, the building materials company said it seeks a friendly solution to the problem that has unfolded since May 2022, when it was ordered to stop operations. 

“We remain open to a solution negotiated in good faith, fruitful and friendly, of the disputes between Vulcan and the Mexican government,” the release said. “The fact that Vulcan has not yielded to pressure and manipulation of the government does not mean we are arrogant or high-handed. The truth is we have not received a generous offer for the acquisition of our property.”

The company also said it is the target of “political threats, authoritarian acts and false accusations” promoted by the Mexican government. 

President Andrés Manuel López Obrador ordered the immediate closure of Vulcan’s quarries in May 2022, alleging its subsidiary SAC TUN extracted and exported limestone contrary to national ecology regulations for 38 years, polluting water and contaminating underground cenotes (a type of sinkhole). The claim was denied by Vulcan Materials.  

“Like every human activity, our operations have been associated with certain impacts, which have been evaluated, classed and authorized by the Mexican government,” says Vulcan’s release, according to daily Milenio. “We have not 'destroyed the paradise' or caused an ecocide.”

López Obrador has said during his morning press conferences that he would turn the land currently occupied by Vulcan into a natural protected area or a park.  

“Ironically, [the natural protected area] could be used not for the benefit of the population and the environment, but for private purposes of commercial tourism and large cruise operations, as well as naval activities. We will not accept this illegal expropriation of our investments,” said the Vulcan Materials release.

The feud with the company has caused problems between Mexico and the United States, and US Secretary of State Antony Blinken has said the situation could affect Mexico’s FDI.

“We have raised the point generically with the government of Mexico, including the president, that the confiscation of private companies is not a good way to attract investment,” he said last week.

The company demands compensation of US$1.5bn and claims that the Mexican government did not comply with its duty to have a fair and equitable treatment of private investments.

Graphic published by the Mexican govt criticizing Vulcan (Source: Mexican govt)