López Obrador Denies Expropriation of Vulcan Materials Land

President López Obrador denied the possibility of expropriating US-based Vulcan Materials’ quarry in Quintana Roo. His statement follows escalating tensions between Mexico and the United States, triggered by US Secretary of State Antony Blinken's warning that any expropriation of Vulcan's property could have negative impacts on Mexico's FDI.

Blinken expressed concern over the situation during a hearing before the US Senate Foreign Relations Committee. Senator Tim Kaine highlighted the issue, stating that López Obrador has attempted to expropriate Vulcan's land on two occasions. Blinken mentioned that the case is subject to an arbitration procedure and emphasized that confiscating private companies is not conducive to 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,” Blinken stressed.

President López Obrador responded to Blinken's remarks, saying that Blinken may not fully understand the situation. López Obrador clarified that the government is not expropriating the land but rather closing operations due to alleged violations by Vulcan. He claimed that Vulcan violated an order to suspend operations. "We are not expropriating; it is a closure, because we cannot stand by with our arms crossed when the law is being violated in our country and our territory is being destroyed,” López Obrador said during his morning press conference.

López Obrador also mentioned that Vulcan is seeking compensation of over US$1.5 billion before the World Bank's International Centre for Settlement of Investment Disputes (ICSID). He stated that judges have inspected most of the disputed land, with a ruling expected in August 2024.

Vulcan Materials Case 

Last week, US Congress members wrote a letter to Mexican Foreign Minister Alicia Bárcena, urging her to resolve the dispute. They accused the Mexican government of mistreating private companies, as reported by MBN. Republican Senator Katie Britt of Alabama said López Obrador's actions have been consistently unacceptable and illegitimate under both Mexican and international law. She also expressed concern that key infrastructure projects in Alabama and the southeastern United States are in jeopardy due to the Mexican government's intention to close the country’s largest producer of construction aggregates.

The Mexican government has taken action against Vulcan in the past, with police and navy troops occupying Vulcan's facilities in Punta Venado in March 2023. López Obrador has also threatened to convert the property into a protected natural area.

Operations at Vulcan's quarries have been halted since May 2022, following López Obrador's order to close them, alleging illegal extraction and exportation of limestone. Vulcan denied any wrongdoing, stating that it has the necessary permits to operate.