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Cemex breaks into Mexico's legal battle against US miner Vulcan


The intervention of the Government so that the cement company has access to a maritime port administered by Vulcan in Quintana Roo deepens a long conflict that is already in the courts

A member of the Mexican Armed Forces stands guard inside Sac-tun, the subsidiary of Vulcan Materials Co, on Monday, March 20, 2023.PAOLA CHIOMANTE (REUTERS)

A third character is now being added to the saga of the Mexican government against the US mining company Vulcan Materials: the largest cement company in Mexico, Cemex.

The owner of a limestone quarry in the jungle of Quintana Roo, she has had a legal conflict with the Mexican government for years, from which she claims 1.5 billion dollars before an arbitration panel.

From time to time, the conflict broke out in the morning and President Andrés Manuel López Obrador accused the company, which has been established in Mexico for almost 40 years, of causing environmental damage and even being behind the delays in the construction of the Mayan Train.

The conflict escalated even more that weekend, when a video circulated on social networks showing elements of the Navy, municipal police and Cemex employees entering the seaport concessioned to Vulcan in trucks.

The events occurred since March 14, according to Vulcan, one of the main construction material companies in the United States. “Cemex, with the help of armed Mexican police and military, forcibly entered the Vulcan port facilities near from Playa del Carmen,” he said in a statement on Tuesday.

This was published a day after Cemex announced that it entered the facilities under precautionary measures granted by a judge and as part of a criminal complaint.

On Sunday, a video was published on the portal of the US news chain

Fox News

showing the arrival of authorities and Cemex at the Vulcan facilities, and attributes the source of the material to Vulcan.

A few hours later, Senator Katie Boyd, representing the State of Alabama, posted the video on her Twitter account, saying: “This forcible seizure of private property is illegal and unacceptable.

It is shameful that this Mexican presidential administration would rather confiscate American assets than the fentanyl that kills hundreds of Americans every day."

This forcible seizure of private property is unlawful and unacceptable.

It is shameful that this Mexican presidential administration would rather confiscate American assets than the fentanyl killing hundreds of Americans per day.

— Senator Katie Boyd Britt (@SenKatieBritt) March 20, 2023

What appears to be a dispute between two competitors has the background of an international conflict that precedes the current Administration of Andrés Manuel López Obrador.

Vulcan, which has operated in Mexico under the names of its subsidiaries, first Calica and later Sac-Tun, has been excavating limestone in the area since 1986, the federal government reported.

However, after a change in local environmental regulation in 2017, the regulator in charge closed part of its operations and issued a sanction.

Vulcan responded in 2019 with a lawsuit that is currently at the International Center for Settlement of Investment Disputes (ICSID), a World Bank arbitration tribunal, for $1.5 billion.

When López Obrador came to power, the President offered Vulcan an exchange: if the company withdrew the lawsuit and stopped extracting on the site, it would obtain rights to develop a tourism project on the site.

Vulcan did not officially reject the offer, but the lawsuit continues.

Months later, López Obrador began to attack Vulcan in press conferences and, in December, suggested that the delays in one of the sections of his emblematic works, the Mayan Train, is because Vulcan has interests in the place.

“We are talking about a section where there is more money,” the President said at a press conference in May, “it is 1,500 kilometers, and these 50, but this is where the interests are, there is Xcaret, there is Vulcan, a American company that is causing an ecological catastrophe.”

That same month, the government shut down Vulcan's operations in Quintana Roo and the company has not operated since.

Vulcan owns four properties and has the concession to operate the port, which is why it has had a contract with Cemex for 20 years.

The Mexican company does not extract rock there, but lands its product at the port to supply its clients in the region.

In December, when the government closed its operations, Vulcan terminated its contract with Cemex, for which reason it was not allowed access to its space and its equipment.

After 20 years of having a contract with Vulcan, Cemex appealed to two courts in Quintana Roo, as confirmed to EL PAÍS by a source with knowledge.

While the criminal process between the two companies continues, a judge granted precautionary measures that allow Cemex to enter the facilities.

For his part, an internal source at Vulcan told EL PAÍS that he has obtained an order from a federal court in Quintana Roo ordering the authorities to leave the facilities.

The entrance of Cemex to the facilities, guarded by elements of the police and the Navy, arrives at a moment of tension between the US and Mexico.

In addition to the two processes that the White House opened against Mexico for what it considers to be a violation of the free trade agreement, the TMEC, the mess with Vulcan Materials increases recent tensions between the White House and the National Palace.

On Wednesday, López Obrador charged against US foreign policy for a published report that indicates torture, massacres and forced disappearances at the hands of the Mexican authorities, in violation of human rights.

"It's a mess," said the President, and accused the authors of the document of being "slanderers."

The US has also pressured Mexico to stop fentanyl being trafficked from south to north, unleashing a health crisis.

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Source: elparis

All news articles on 2023-03-23

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