The Mexican government said on Friday, May 6th, it has closed a limestone gravel quarry owned by a U.S. company, a move likely to add fuel to an ongoing trade dispute with the firm.
The Environment Department said Friday it closed the quarry owned by Vulcan Materials near Playa del Carmen, on the Caribbean coast. Parts of the quarry have been excavated below the water table, and the department said the mining threatened water quality and subsoil conditions.
But the timing of the move raised questions: Vulcan has been operating the quarry for around three decades, and President Andrés Manuel López Obrador had recently threatened the company.
López Obrador wants the water-filled quarry to be used as a theme park to rival the nearby Xcaret park. He also wants Vulcan to build a cruise ship dock at a freight terminal it operates on the coast. He has pressured the Alabama-based aggregates company to sell the property to the government, or open a water park itself.
Vulcan issued a statement Thursday saying it “strongly believes that this action by the Mexican government is illegal.”
“The Company has the necessary permits to operate and intends to vigorously pursue all lawful avenues available to it in order to protect its rights and resume normal operations,” it said.
The company’s property includes several adjoining sites; some have already been quarried, and others haven’t. In late 2018 the company filed for an arbitration panel under the old North American Free Trade Agreement, after Mexico refused to allow quarrying at some of the sites.
The company said a decision is expected in the second half of 2022. The Environment Department said the company is seeking about $1.5 billion in damages.
The Mexican government originally said a tentative agreement had been reached with Vulcan Materials, and the company said it was willing to open a water park and cruise ship facility. But it has no experience at doing either, and would really just like to continue mining gravel.
Source: El Economista