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Vulcan rejects Mexico’s offer for Quintana Roo property

The Birmingham-based Vulcan Materials believes the Mexican government undervalued it’s property.

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On Monday came the latest in the dispute between Birmingham-based Vulcan Materials and the Mexican government, underscoring a disagreement in the valuation of Vulcan’s Quintana Roo mining unit. Vulcan remains open to reasonable negotiations.

In July 2023, President López Obrador bid to acquire Vulcan’s Mexican assets for $385 million to end the dispute, which pales next to Vulcan’s valuation of the 6,000-acre property near Playa del Carmen at $1.9 billion.

The Mexican government highlights the belief that Vulcan’s mining operation is a threat to the environmental and historical preservation of the land. Nearby, underground rivers and caves are being negatively affected by the mining. 

Vulcan claims that these allegations are false and that they have taken necessary steps to preserve these sites, citing other nearby mining operations as the culprit for any harm done. 

The Mexican government aims to create a “protected natural area” to promote ecotourism where the Vulcan mining unit currently sits.

Alleging the possible environmental factors, the quarry has been closed since 2022. President López Obrador said it will remain closed until he leaves office in October. 

Vulcan sees this act as authoritarian and believes they are being forced out of their investment, insisting that this is not a fair deal for the limestone reserves and the port in their possession. 

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With no signs of easing up, international arbitration looms. Should the two parties fail to resolve, an arbitration panel under international law may be called upon to decide, prolonging the uncertainty surrounding Vulcan’s operations in Mexico.

At large, this raises questions about the legitimacy of foreign companies in Mexico in the eyes of the Mexican government. Vulcan claimed in a statement back in March that the invasion of their facility was not backed by legal warrants and their commercial and property rights were violated.

Mary Claire is a reporting intern.

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