Mexico (Washington Insider Magazine)— Mexican President Andres Manuel Lopez Obrador ruled out expropriating the mine of US construction giant Vulcan Materials on Wednesday, but stated the property on which it works will remain closed until at least the end of his term. During his regular press conference, Lopez Obrador accused the company of environmental damage, which it denies.
US Secretary of State’s Warning
According to Elpais, US Secretary of State Antony Blinken cautioned that the Mexican government’s attempt to appropriate land from Vulcan Materials is detrimental to investment. During a Senate appearance, Blinken responded to Senator Tim Kaine’s query about US defence of the mining company, stressing that such actions send a negative message to potential investors.
López Obrador’s Defense
Mexican President Andrés Manuel López Obrador defended his decision to reclaim the 2,000 hectares at the core of the controversy, claiming that Vulcan Materials had broken environmental rules. He clarified that his decision was not a federal expropriation, but rather a necessary closure due to the company’s noncompliance with regulations.
Senate Concerns and International Arbitration
Senator Tim Kaine highlighted the issue during Blinken’s Senate testimony, accusing López Obrador of multiple attempts to seize the land, including using police and military forces. Blinken noted that the case is under international arbitration, with Vulcan Materials seeking $1.5 billion in compensation under NAFTA provisions for alleged unfair treatment.
Senators’ Letter to Mexico
A group of US senators recently sent a letter to Mexican Foreign Secretary Alicia Bárcena, warning that continued obstruction of Vulcan Materials’ operations could prompt the US to consider all available resources to protect the company’s interests.
López Obrador’s Vision for the Land
López Obrador revealed plans to transform the contested land into a recreation center and a protected natural reserve, should the Mexican government secure the property. Despite offering 8,000 million pesos for the land, Vulcan Materials has repeatedly rejected the proposal.
Vulcan Materials’ Legal Action
While López Obrador publicly defends his position, Vulcan Materials pursues its case through international arbitration, quietly seeking redress for what it claims is a breach of fair treatment under NAFTA.
The conflict over the port of Punta Venado and surrounding limestone land underscores the broader tensions between Mexico and the United States regarding foreign investment and environmental regulation. Both nations are steadfast in their positions, with potential implications for future bilateral relations and investment climate.
