Vulcan Materials' Expropriation Process Advances

The land owned by Calica, a subsidiary of Vulcan Materials, is in the process of being declared a protected natural area, giving President López Obrador the opportunity to fulfill his promise to expropriate its land. Although Vulcan Materials has not issued a statement, it is expected to initiate new legal proceedings against the Mexican government.

SEMARNAT has given notice of consultation of the study that justifies declaring Leona Vicaria as a protected natural area, located on Calica’s lands. The government proposed the extent of the protected natural area to be 2,387ha, which would include all of Calica's 1,500ha. The notice was published on Nov. 8 in the Official Gazette of the Federation (DOF), so those interested in giving their opinion will have 30 days to do so. After these, López Obrador will be able to issue the decree for the protection of the natural area, which could lead to the expropriation of Calica’s lands.

Sources close to Vulcan Materials reported that they have not commented on the government action since they are analyzing the case with specialists from the National Commission of Protected Natural Areas (CONANP). Proceso reported that Calica could initiate new legal proceedings against the government in the coming days.

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 October 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.