Mexico to pay Vulcan Materials $15 million in arbitration case

Investing.com -- Mexico will pay Vulcan Materials approximately $15 million following an international arbitration ruling, far below the $1.7 billion the U.S. quarrying company had sought over the closure of its Mexican mining operations.

The arbitration case was filed in 2018 by Vulcan's Mexican unit, Calizas Industriales del Carmen, under the North American Free Trade Agreement after Mexican authorities closed its limestone extraction operations in Quintana Roo state.

Mexico's Economy Ministry said Monday that the arbitration tribunal rejected nearly all of Vulcan's claims. The tribunal upheld only one claim related to the January 2018 closure of a single site, according to the ministry.

A government source told Reuters the compensation amount would total around $15 million, representing less than 1% of the original claim.

Vulcan Materials said Monday the tribunal determined Mexico had violated NAFTA in several areas. The company described the financial compensation awarded as "insignificant" but did not disclose the specific amount.

The company argued that Mexico disregarded an agreement intended to release part of its aggregate reserves and ordered the "arbitrary closure" of its extraction operations.

Former Mexican President Andres Manuel Lopez Obrador had accused Vulcan of causing severe environmental damage, including destruction of cenotes and contamination of underground rivers, through decades of extracting limestone below the water table. Vulcan accused the Mexican government of illegally expropriating its assets.

The affected land was later declared an environmental protection zone.

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