US builder Vulcan to challenge expropriation of land in Mexico for nature reserve
Adds details throughout
Vulcan seeking more than $1 billion in compensation via arbitration
Outgoing President Lopez Obrador criticized Vulcan's environmental impact
US senators propose bill to retaliate against Mexico's expropriation
MEXICO CITY, Sept 24 (Reuters) -U.S. construction firm Vulcan Materials will defend itself using all available legal means, it said on Tuesday, after Mexico's outgoing president declared land that contains a company-run limestone quarry and port as a nature reserve.
The Alabama-based company has previously said it will also seek more than $1 billion in compensation in an arbitration demand first filed in 2018, as the long-running land dispute also threatened broader business ties with the United States, Mexico's top trade partner.
Late on Monday, Mexico's government decreed a vast tract of land stretching from Playa del Carmen to Tulum part of a protected natural reserve, including Vulcan's local operations.
President Andres Manuel Lopez Obrador, who leaves office next week, has long criticized Vulcan's activities as environmentally damaging, and officials ordered a halt to limestone quarrying by Vulcan's Calica unit two years ago.
"The expropriation of our company-owned land and port is yet another escalation," the company said in a statement released on Tuesday that also defended its environmental track record.
Vulcan VMC.N has accused the Mexican government of illegally expropriating its assets, demanding more than $1.5 billion in compensation via arbitration mediated by the International Centre for Settlement of Investment Disputes (ICSID).
Lopez Obrador had previously threatened to turn Vulcan's land into a nature reserve if talks to buy the company's property failed. The company quarried limestone in Mexico for over three decades.
According to the president, Mexico had offered up to 7 billion pesos ($362 million) for the land, but Vulcan has called the amount inadequate.
"That figure substantially undervalues our assets, including our reserves," the company said.
The latest move also threatens to strain incoming President Claudia Sheinbaum's relationship with other U.S. companies.
On Tuesday, Vulcan criticized what it described as Mexico's failure to live up to its trade commitments, including the U.S.-Mexico-Canada (USMCA) trade pact, saying it will have a chilling and long-term effect on U.S.-Mexico investment ties.
On Monday, before the decree was published, a group of U.S. senators introduced a bill that would retaliate by effectively rendering the Vulcan port located on Mexico's Caribbean coast unusable for shipping or cruises.
The proposal would prohibit vessels from entering a U.S. port if they had previously used a port, land or infrastructure that had been deemed by the Department of Homeland Security as illegally seized from a U.S. entity by another nation in the Western Hemisphere. A similar bill was introduced by U.S. House of Representatives lawmakers in May.
Lopez Obrador had previously argued that Vulcan's port could be turned in to a dock for cruise ships.
($1 = 19.3428 Mexican pesos)
Reporting by Kylie Madry and Anthony Esposito in Mexico City; Editing by David Alire Garcia and Matthew Lewis
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
