Mexico’s President, Andrés Manuel López Obrador, has offered to buy an American company’s Caribbean coast property for $385 million to end a long-standing property dispute. The property in question, owned by Alabama-based Vulcan Materials, was previously operated as gravel extraction pits at the Yucatan peninsula site until the Mexican government closed them down.
López Obrador plans to present a formal offer to Vulcan Materials. However, the company has stated that it is yet to receive the president’s proposal or respond to the idea. In papers filed for an international arbitration case, Vulcan Materials valued the property at $1.9 billion. López Obrador’s much lower offer is based on a government assessment, which he believes is fair.
The president sees potential in the property’s freight shipping dock, which he intends to convert into a dock for cruise ships. As the only significant port facility on that stretch of the Caribbean coast, the dock would also be instrumental in transporting essential materials for López Obrador’s ambitious infrastructure project, the Maya Train. The pits created by Vulcan Materials’ gravel extraction operations could potentially be utilized as swimming pools or an ecotourism area, operated as a concession by a private operator. The pits are inhabited by crocodiles, a protected species in Mexico.
López Obrador has issued a vague threat of seizing the property if Vulcan Materials does not accept the offer before his term ends in September 2024. The president expects the company to drop its damages-seeking cases before the arbitration panel as part of the deal.
The dispute between López Obrador’s administration and Vulcan Materials dates back to 2021 when the Mexican environment ministry closed the company’s limestone quarry, forbidding it from exporting stone used in building projects in the U.S. and Mexico. The president accused Vulcan Materials of extracting and exporting rock without proper permits, while the company maintains that it had the necessary permits.
Tensions escalated further in March when Mexican police seized Vulcan Materials’ cargo terminal, using it to unload cargo from a Mexican cement and aggregates company, Cemex. This move prompted concerns from the U.S. State Department regarding the fair treatment of American companies in Mexico.
The resolution of this property dispute is crucial for the advancement of the Maya Train project. The 950-mile train line aims to connect beach resorts and archaeological sites along the Yucatan Peninsula, providing economic opportunities for inland communities. To complete the project, materials such as cement, crushed stone, and steel are required, which heavily relies on the availability of the freight dock owned by Vulcan Materials.
It remains to be seen whether Vulcan Materials will accept López Obrador’s offer or negotiate a different resolution to the dispute. As the president asserts, the issue will be resolved one way or another before his term ends. The outcome of this ongoing property dispute will ultimately impact the future development of the Caribbean coast and the Maya Train project in Mexico.
