Mexico set to offer Vulcan $390 million to buy land to settle spat

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Reuters | 27 July 2023

Mexico set to offer Vulcan $390 million to buy land to settle spat

MEXICO CITY, July 27 (Reuters) - Mexico plans to offer 6.5 billion pesos ($390 million) to U.S. construction company Vulcan Materials for land it holds in the southeast of the country, President Andres Manuel Lopez Obrador said on Thursday, in a bid to resolve an ongoing dispute.

Vulcan (VMC.N), which has been extracting limestone in Mexico for more than three decades, filed a complaint in 2018 with the World Bank arbitration tribunal, the ICSID, over a disagreement with the previous government.

In May 2022, Mexican officials closed Vulcan’s facilities alleging environmental damage that the company denies. Since then, Vulcan has been unable to export its production and is demanding over $1.5 billion in compensation from the ICSID.

"The letter that I sent to the ambassador (of Mexico in the U.S.) Esteban Moctezuma is on the way so he can formally make the proposal," Lopez Obrador said at his daily press conference.

"We did an appraisal (...) and it has a value of around 6,500 million Mexican pesos ($386.99 million)," he added, noting the intention to buy all the company’s 2,400 hectares (5,930.5 acres) in the area.

Lopez Obrador previously proposed the company convert its operation, in the Caribbean state of Quintana Roo, into a tourist development with a port for cruise ships.

The firm responded that it was open to exploring ways to adapt its activities in support of tourism in the region, as long as it could continue to supply stone aggregates to its clients in the United States.

"If they care about climate change ... they shouldn’t reject the offer we’re making," the president said, adding that if an agreement is reached, the company should suspend its lawsuits against Mexico.

source: Reuters