International Lawsuit Looms Over Vulcan Materials
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International Lawsuit Looms Over Vulcan Materials

Photo by:   Jhana Ellard
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Fernando Mares By Fernando Mares | Journalist and Industry Analyst - Wed, 04/06/2022 - 11:45

Mexican President Andrés Manuel López Obrador warned business people from Sac Tun and Vulcan Materials Company about a potential international lawsuit lest they stop resource exploitation at Calica, Quintana Roo. 


In 2019, Vulcan Materials requested arbitration against the Mexican government under USMCA regulations due to the revocation of its port concessions which the company says blocked its operations and generated monetary losses. Vulcan Materials requested US$1.1 billion in compensation, stating that the Mexican government’s actions were unilateral and a clear violation of existing agreements.


Back in February, López Obrador proposed the US company to withdraw the lawsuit in exchange for resources to convert its limestone production facility into a tourism project. The president had instructed Mexico’s Ambassador to the US, Esteban Moctezuma, to negotiate with the foreign mining company but an agreement has not been reached.


During his morning conference of March 31, the president shared the details of his proposal to Vulcan Materials executives: the removal of the material reserves they have stored in Playa del Carmen and a full operation shutdown, with the option to turn Punta Venado into a sea terminal for ferries and cruises. “We are talking about one of the most important touristic zones of Mexico and the world. The port has the right draft; we do not have a port on this side. The most important is in Cozumel and its (Punta Venado) success is guaranteed,” said the president.


According to López Obrador, Vulcan Materials’ activities are destroying the environment. He threatened to record a video to show the impact on the local flora and fauna and to file a lawsuit with the UN. He also claims that his proposal is fair and is urging Vulcan Materials to make a decision, adding that he is not thinking about canceling the project or expropriating the land.


Vulcan Materials arrived in Mexico 45 years ago through a joint venture with Grupo ICA. The two companies created Crescent Market to produce high-quality limestone in Playa del Carmen and export it to various countries, being the US the most important.

Photo by:   Jhana Ellard

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