AMLO prepares to take over Vulcan Property

MEXICO CITY: The Mexican government is preparing to take control of a quarry and port owned by Vulcan Materials Co on the nation’s Caribbean coast after years of negotiations failed to produce a deal to buy the property, according to people familiar with the plans.

President Andres Manuel Lopez Obrador’s administration is planning to declare the land south of the resort city of Playa del Carmen a natural protected area, according to the people, who requested anonymity because they were not permitted to speak publicly.

That would prevent the US construction firm from extracting limestone at the site it has owned for decades.

The timing of an announcement from the government is unclear, but it plans to move ahead barring an unexpected breakthrough or concession from the Alabama-based company during stalled negotiations in which the two sides have remained far apart, one of the people said.

Lopez Obrador’s office and Mexico’s Foreign Affairs Ministry didn’t respond to requests for comment. Vulcan declined to comment.

Asked about the Vulcan case last Wednesday at his morning news conference, the president said he expected it to be resolved in the next few days.

“We always seek negotiation, agreement, dialog, always – and that is what is being done in this case,” Lopez Obrador said.

“But of course, when we see that they want to impose themselves without being right because they feel very powerful, well then there’s no other option than to apply the law.”

Last year, Vulcan sought the Biden administration’s protection from what it saw as the threat of a government takeover of the Mayan Riviera property, saying that a purchase offer from Mexico deeply undervalued the assets.

AMLO, as the president is known, has previously alleged environmental damageand sent the Mexican marines to occupy the land.

Vulcan’s chief executive officer has defended its environmental record and cited international awards and its reforestation efforts.

A takeover of the property would be AMLO’s latest move against business as the nationalist leader seeks to secure the state’s power before his term ends in October.

Mexico in December took control of operations at a hydrogen processing plant owned by French industrial gas manufacturer Air Liquide in Hidalgo state.

Last April, AMLO announced plans to buy US$6bil worth of energy assets from Iberdrola SA after the Spanish company faced political hostility from Mexico that affected its permits and supply.

A month later, the government seized a stretch of rail line owned by billionaire German Larrea’s Grupo Mexico.

AMLO also has ordered the cancellation of ongoing projects including an airport and a beer plant.

Vulcan has been in litigation and arbitration with Mexico since 2018 under the North American Free Trade Agreement, which was later replaced with the US-Mexico-Canada agreement during the Trump administration.

The company previously said that the government’s actions are illegal, and that it would add the most recent measures to an ongoing arbitration case against Mexico.

Vulcan said last October that it learned through the press that AMLO intended to acquire its 2,400 ha of land for US$360mil.

But the company said it had only received an “inadequate appraisal” of the property, which includes the Punta Venado port and Sac Tun quarry. — Bloomberg