Image credits: Artyom Korshunov
News Article

Government Holds Smear Campaign Against Us: Vulcan Materials

By Paloma Duran | Fri, 06/24/2022 - 10:05

After President López Obrador once again accused Vulcan Materials of causing an ecological disaster in Quintana Roo, the company responded by declaring that the president's statements are untrue. In addition, Vulcan highlighted that the measures taken by the government to suspend its operations are in breach of the USMCA.

Last week, López Obrador announced that although a dialogue with Vulcan will be maintained, the case will be taken up to international bodies, including the UN. The president stressed that he took the measure due to the environmental catastrophe that the company has caused in the region and to ensure that it does not resume operations after his administration ends in 2024.

“Perhaps they think that my government is going to end soon and that they will be able to restart their work. But we are not going to file complaints to the UN to avoid this. I am also thinking of notifying the stock exchanges, because we all must take care of the environment and ensure justice is done for the damage they caused,” said López Obrador.

For its part, Vulcan Materials said that the company is unfairly attacked by the government because it has always operated in accordance with the laws of the country and with a solid commitment toward protecting the environment. Moreover, Vulcan highlighted that it has been operating in Mexico for 30 years, in which they have been awarded environmental certifications and had never been accused of polluting, until López Obrador's “smear campaign.”

The company said that the government's actions that prevent the exploitation and importation of stone material are not only affecting the company but also the state of Quintana Roo, since it removes a key local source of jobs and income. Moreover, Vulcan noted in a press release that these actions “are against the spirit and letter of the USMCA. Furthermore, Sac-Tun is in danger, setting a precedent of political and administrative arbitrariness, as well as legal uncertainty."

Vulcan Materials has mined limestone in Quintana Roo since 1986. However, in 2018, the company initiated a legal arbitration case against Mexico under the USMCA due to the revocation of its port concessions. The company explained that this revocation closed its operations and generated significant monetary losses, so it requested a compensation of US$500 million. According to the company, the government's actions were unilateral and violated existing agreements. Meanwhile, the Mexican government has proposed several alternatives for the company to make use of the concession without resorting mining.

“We offered to facilitate the port of Calica, which would be great for cruise ships. We also offered them an alternative tourism project because we will no longer allow material to be extracted. If an agreement is not reached, we will also appeal to national and international courts,” López Obrador said.

On May 23, 2022, López Obrador received Thomas Hill, CEO, Vulcan Materials, after tension between the company and the Mexican government escalated following the latter’s accusation that the company extracts and exports limestone to the US without the required permits. However, no agreement was reached.

The data used in this article was sourced from:  
MBN, Vulcan Materials,
Photo by:   Artyom Korshunov
Paloma Duran Paloma Duran Journalist and Industry Analyst