MEXICO CITY (Reuters) – The Mexican government said on Thursday that it is negotiating the settlement of a $1.1 billion lawsuit by Vulcan Materials Co over a government effort to shutter its limestone mine near the Caribbean resort of Playa del Carmen.
President Andres Manuel Lopez Obrador said at a news conference that he has given the company until March to respond to an offer of facilities to develop a tourism project in the area in exchange for withdrawing its complaint and halting mining activities in the area.
U.S.-based Vulcan, a leading producer of gravel, sand and crushed stone, operates in Mexico through its Calica unit, which has several concessions in the southeastern state of Quintana Roo, where it mines crushed limestone that is later shipped to the United States, where it is used in construction.
During the same news conference, Interior Minister Adan Agusto Lopez specified that there are three Vulcan properties in the area, two of which are in operation, one with a concession with no time limit and the other with an expired permit, while the authorization to operate in the third is about to end.
Neither Vulcan nor Calica responded to requests for comment on the dispute or details of the potential settlement or the suit itself. The Mexican economy ministry also could not be reached for comment.
The International Center for Settlement of Investment Disputes’ (ICSID) website mentions a 2019 claim for $500 million filed by Vulcan against Mexico that is still pending resolution.
According to an excerpt of the lawsuit on the ICSID site, Vulcan is protesting “the revocation by government agencies of the port concession of the plaintiff’s wholly owned subsidiary, Calica, and the forced closure of extraction operations” of two facilities in the area.
Lopez Obrador, who reported that the area involved occupies 4,200 hectares (10,400 acres) near the resort, has previously threatened to complain to the United Nations about the area’s “destruction” as a result of Vulcan’s mine, although on Thursday he toned down his remarks.
“I hope that an agreement is reached, which is going to be the best,” he said.
(Reporting by Raul Cortes Fernandez; writing by Valentine Hilaire; editing by Noe Torres and Marguerita Choy)
