Mexico City — Mexico is reviewing its legal options after an international arbitration tribunal largely rejected claims from a subsidiary of U.S.-based Vulcan Materials Company but ordered compensation for one measure, the Economy Ministry announced Monday.
The tribunal, operating under the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), dismissed most of the claims filed by Vulcan Legacy LLC against the Mexican state under the North American Free Trade Agreement (NAFTA). The only claim it upheld related to the closure of a property owned by Calizas Industriales del Carmen (Calica) in January 2018.
The Economy Ministry said the compensation awarded for that measure amounts to less than 1% of the original amount claimed. The ministry added that the government is “analyzing the tribunal’s decision in detail to determine the legal actions available.”
Vulcan Materials, in its own statement, said the tribunal concluded that Mexico “violated NAFTA in several respects” and described the monetary award as “insignificant.” The company said the arbitration stemmed from an alleged breach of an agreement to unlock some of its aggregate reserves in Mexico and what it called an “arbitrary closure” of its extraction operations. Under applicable rules, the full decision remains confidential until its release.
Background of the Dispute
The case centers on Vulcan Materials’ operations in Playa del Carmen, Quintana Roo, where Mexican authorities had challenged the company’s extraction of construction materials for years.
In March 2025, President Claudia Sheinbaum said there had been no expropriation of Vulcan’s land, but rather that the property fell within a newly established natural protected area due to environmental damage from unauthorized expansion. “There was never an expropriation; the land belongs to them,” she said, adding that the company had expanded operations without environmental approval and “can no longer continue exploiting it because of the environmental impacts caused by extraction outside the permitted area.”
In September 2024, then-President Andrés Manuel López Obrador signed a decree creating the Felipe Carrillo Puerto Flora and Fauna Protection Area, spanning more than 53,000 hectares across the municipalities of Solidaridad, Tulum, and part of Cozumel, including the Calica mine site. The decree restricts activities and charges the Environment Ministry with protecting and restoring the region’s ecosystems.
López Obrador had previously said Mexico offered between 8 billion and 10 billion pesos for the concession lands, but the company did not accept. After talks failed, the government declared the area a natural protected zone, citing environmental preservation needs.
