Vulcan close to resolving Mexico aggregates dispute

Vulcan Materials says it is close to reaching an agreement with the Mexican government over its aggregates operations in the country.
Quarry Products / May 4, 2022
By Liam McLoughlin
Vulcan has been in dispute with the Mexican government since 2018 over its aggregates operations in the country
Vulcan has been in dispute with the Mexican government since 2018 over its aggregates operations in the country

The US construction materials provider says this means it will now be be able to resume shipments of aggregates from Mexico to the United States.

"We are making progress in our discussions with the Government of Mexico," said Tom Hill, chairman and CEO of Vulcan Materials. "Earlier this year, Mexico delayed issuing a historically routine three-year customs permit for Vulcan's deep-water port at Punta Venado. In March, we received that customs permit, which enabled us to continue servicing our customers."

In discussions between Vulcan and senior Mexican officials in April, Vulcan says it had once again indicated its openness to supply construction materials needed for the construction of the Mayan Train and other infrastructure projects and to make port capacity available for transfer of train-related construction materials.

Vulcan adds that it also indicated an openness to adapt its mine plan to enable development and construction over time of a large-scale ecotourism project — suggested by the Government of Mexico — on land owned by the company, as long as the Company can continue supplying its customers. Development could begin immediately on certain areas of the land owned by Vulcan from which reserves have already been depleted. Vulcan says it is also prepared to explore an expansion of the Punta Venado maritime terminal to receive passenger, freight and naval vessels in the coming years.

"While there is more to be done before a final binding agreement can be reached, we are working toward a satisfactory resolution for all those involved that enables us to continue to supply aggregates to our customers," Hill added.

Since late 2018, Vulcan Materials has been engaged in a North American Free Trade Agreement (NAFTA) arbitration with Mexico over Mexico's repudiation of an agreement to unlock a portion of Vulcan's aggregates reserves in the country and what Vulcan says is the arbitrary shutdown of a portion of the company's quarrying operations there. A hearing took place in July 2021, and a decision is expected in the second half of 2022.

Vulcan says it has continued to engage with Mexican government officials to pursue an amicable resolution of the dispute while awaiting the final resolution from the NAFTA tribunal.

Vulcan added in a statement: "The company has quarried limestone legally in Mexico — on land that it owns — for over 30 years. Vulcan is the sole owner of four lots of land south of Playa del Carmen, Quintana Roo, that together form its 'Sac Tun' operation, formerly known as Calica. Vulcan has the right to maintain full property ownership over these lots, owns the limestone reserves in the same, and complies and has always complied with Mexican law, including the laws and permitting regulating our operations from which we service our customers both in Mexico and abroad."

Vulcan Materials, headquartered in Birmingham, Alabama, claims to the largest US supplier of construction aggregates – primarily crushed stone, sand and gravel – and a major producer of aggregates-based construction materials, including asphalt and ready-mixed concrete.

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