Mexico’s president threatened to declare a disputed property owned by Vulcan Materials Co. an environmentally protected area, after failing to reach an agreement with the US construction firm.
(Bloomberg) — Mexico’s president threatened to declare a disputed property owned by Vulcan Materials Co. an environmentally protected area, after failing to reach an agreement with the US construction firm.
Andres Manuel Lopez Obrador said Vulcan continued work at the site even while in talks with his government over its potential purchase of the property, which was occupied by Mexican marines in March. Accusing the company of “vile trickery,” AMLO — as the president is known — told reporters Friday that he would act by decree if necessary to halt the destruction in “one of the most beautiful areas in the world.”
His comments came a day after Bloomberg reported that the Alabama-based firm was seeking the Biden administration’s protection from what it sees as the threat of a hostile takeover of its property. The 2,400 hectare (5,930 acre) plot south of the resort city of Playa del Carmen includes a port and a quarry.
AMLO’s administration has said it wants to turn part of the site into a tourist complex and convert the rest into naturally protected land. The president said Vulcan would receive the compensation it’s owed under law if it fails to reach an agreement with his government.
“I thought they were keeping their word, and then suddenly I realized that they’ve been digging and that they stopped only when I went there,” AMLO said at his daily press briefing. “They are still destroying and dynamiting.”
Shares of Vulcan fell less than 1% to $201.61 at 12:29 p.m. in New York.
Chief Executive Officer Tom Hill, in letters sent to the ambassadors of both the US and Mexico, said Vulcan has only received an “inadequate appraisal” of its property from AMLO’s government. He said he doesn’t consider the $360 million offer an act of “serious, good-faith negotiation or a reasonable attempt to fairly resolve the dispute.”
Mexico’s president disagreed with that assertion, discussing the issue for about 20 minutes.
“The valuation was done by the government institution that’s in charge of valuations,” Lopez Obrador said. “How are we going to pay more than that without a valuation? We’d be falling into an act of corruption.”
The dispute is the latest in a string of confrontations with businesses that accuse Mexico of taking arbitrary and unfair decisions that hurt their interests and allegedly violate the rule of law. Earlier this month, AMLO’s government unilaterally restructured the way airport operators charge for their services, sending their stocks plunging.
The president has taken a largely enigmatic approach to the business community. While Mexico has seen a surge in foreign investment, it’s been punctuated by moves such as seizing a stretch of rail line owned by a billionaire industrialist and ordering the cancellation of ongoing projects including an airport and a beer plant.
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