US company accuses Mexico of expropriating its Caribbean coast property

MEXICO – An American stone mining company said Tuesday that the Mexican government has carried out a de facto expropriation of its properties on Mexico’s Caribbean coast.

Late Monday evening, Mexico’s Department of the Interior issued a decree declaring the company’s seaport and quarries a protected natural area, effectively banning the company from operating on its own land.

President Andrés Manuel López Obrador previously threatened to expropriate the property and later offered to buy it for about $385 million, saying at the time he wanted to turn it into a tourist attraction.

Alabama-based Vulcan Materials said in a statement Tuesday that the move violates the U.S.-Mexico-Canada Free Trade Agreement. It said the measure is part of “a series of threats and actions by the current administration against our operations.”

“The expropriation of our company’s land and seaport is another escalation and another violation of Mexico’s obligations under trade agreements,” the statement said. “This illegal measure will have a long-term, crippling effect on trade and investment relations between Mexico and the United States.”

The decree, published in the official gazette, shows an oddly shaped nature reserve that exactly follows the boundaries of the property owned by the company.

Although the decree states that the purpose of the park is to protect local animal and plant species, in reality the seaport and quarries are very devastated areas that do not resemble a nature reserve and would contribute little to this purpose.

Moreover, the decree came after the López Obrador administration cut down tens of thousands of trees across a wide swath of jungle to build a tourist train line near the quarries.

The company, which was already involved in a complaint with the Mexican government’s dispute resolution commission, said on Tuesday it would use “all available legal channels” to fight the new decree.

In June, the U.S. company rejected a buyout offer made by the Mexican president, saying it “significantly undervalues ​​our assets.”

In documents filed in the case with an international arbitration panel, Vulcan Materials valued the nearly 6,000-acre (2,400-hectare) property, located south of the Playa del Carmen resort, at $1.9 billion.

Mexico’s president has threatened to expropriate the vast land in the past, saying pits the company dug to extract crushed limestone had damaged the area’s delicate system of underground rivers and caves.

However, Vulcan Materials denied the allegation at the time. “Our operations did not negatively impact underground caves, cenotes or archaeological sites. In fact, we mapped, protected and preserved these valuable resources,” the company said in a statement.

Instead, the company claimed that some other quarries in the area were operating illegally. “Unlike other quarries that operated illegally to supply Mayan Train, our operations were duly permitted,” the company said.

The Mayan Train is López Obrador’s pet project to build a tourist train around the Yucatán Peninsula. Activists, cave divers and archaeologists say the project has damaged caves that contain some of the oldest human remains in North America.

López Obrador has previously said the most attractive part of the property is the company’s cargo dock — the only deep-water port on the mainland — which he has previously said he would like to convert into a cruise ship dock.

López Obrador also said he wants to use the flooded pits the company dug from hundreds of acres of limestone soil as “swimming pools” or an “ecotourism” area that would be managed on a concession by a private operator.

However, the huge quarry pits are home to crocodiles, which are a protected species in Mexico.