Vulcan Materials Co. CEO J. Thomas Hill says he expects a resolution next year in the company’s dispute with Mexico over a limestone quarry and port facility near Cancun that the Mexican government seized with armed troops earlier this year. But the two sides remain at odds over the value of the property.
The Birmingham, Ala.-based materials supplier and the Mexican government have a long-running dispute over the company’s quarry and port on the Gulf of Mexico south of Playa del Carmen. An arbitration case is pending before the World Bank International Center for Settlement of Investment Disputes.
“We feel very good about our position,” Hill said about the case during a call with investors Aug. 3 announcing the company’s quarterly financial results. “We feel very good about our case. We feel very good about the evidence.”
Hill’s comments came after Mexican President Andrés Manuel López Obrador told reporters during a July 27 press conference that the country planned to offer Vulcan 6.5 billion pesos, equivalent to roughly $383 million, to buy the property, based on an assessment of the 6,000-acre site. López Obrador said he wants to turn the site into a tourist attraction, using the port for cruise ships.
A Vulcan spokesperson declined to comment on the offer.
Vulcan itself values the property at $1.9 billion, the Associated Press reported, citing documents filed in the World Bank arbitration.
In March, the dispute escalated as Vulcan said Mexican military and police entered the port by force to allow another materials supplier, CEMEX, to use the facility. CEMEX said in a statement at the time that it has a contract with a Vulcan subsidiary for use of a marine terminal at the port but “has had difficulties accessing” the site since late last year. Vulcan has said the lease expired at the end of last year, but it is open to negotiating a new lease.
Hill said on the earnings call that the best case scenario he expects from the World Bank arbitration would be for Vulcan to “get a large check” accounting for the magnitude of the shut down business from the facilities.