US Pressures Mexico Against Expropriation of Vulcan Materials

Members of the United States House of Representatives from both the Democratic and Republican parties introduced a bill to sanction ships that utilize ports expropriated from US companies. The proposal aims to pressure Mexican President López Obrador to reconsider the expropriation of the port of Punta Venado in Quintana Roo, owned by Vulcan Materials.

The proposal seeks to prevent ships from unloading or being repaired at this port should Vulcan Materials' port is expropriated by the Mexican government, which intends to declare it a protected natural area and convert the port into a private facility for ships and ferries. 

Last week, US congressmen sent a letter to Mexican Foreign Minister Alicia Bárcena, urging her to address the dispute and where they accused the Mexican government of mistreating private companies. Katie Britt, Republican Senator, Alabama, wrote that President López Obrador's actions have been systematically unacceptable and illegitimate under Mexican and international law. She added that key infrastructure projects in Alabama and the southeastern United States are at risk due to the actions of the current Mexican administration, which intends to shut down the country’s largest producer of construction aggregates.

What Happened to Vulcan Materials?

Vulcan Materials is a leading producer of gravel, sand and crushed stone that has mined limestone in Quintana Roo since 1986. However, in 2018, the company initiated a legal arbitration case against Mexico under USMCA, due to the revocation of its port concessions. The company explained that this cancellation shuttered its operations and generated significant monetary losses, leading to an initial request for US$500 million in compensation. According to the company, the government's actions were taken unilaterally and violated agreements. Meanwhile, the Mexican government has proposed several alternatives, such as a tourism project for the company to make use of the concession without resorting to mining.

In May 2022, Vulcan Materials' activities were shut down by the Mexican government due to environmental concerns regarding its underwater limestone extraction. Vulcan stated that it has all the necessary permits to operate and is resorting to all legal means to defend its rights and restart its activities as soon as possible. In Oct. 2023, Vulcan Materials, was urged to accept the Mexican government’s offer of US$440 million for the 2,000ha it has under concession in Quintana Roo. However, Vulcan refused the proposal and demanded US$1.5 billion in compensation for the government’s decision to close its operations. López Obrador had warned that if Vulcan did not accept the proposal, he would declare the land as a protected natural area.