An international arbitration tribunal, the International Centre for Settlement of Investment Disputes (ICSID), found that Mexico violated the North American Free Trade Agreement (NAFTA) in a dispute with U.S.-based Vulcan Materials Company. The ruling, issued on July 27, concluded a long-running case where Vulcan had sought $1.53 billion plus interest and costs, claiming Mexico interfered with its investment and operations in Quintana Roo.
Despite Vulcan's substantial claim, the ICSID awarded the company only about $15 million. This amount represents less than 1% of Vulcan's original demand. The tribunal largely dismissed Vulcan's claims regarding measures taken by the Mexican government in 2022 and 2023, which constituted the majority of the damages sought. However, it did find Mexico liable for a specific measure in 2018 that impacted operations on one part of Vulcan's property.
The dispute centered on Vulcan's Calica limestone quarry, which Mexican authorities began closing down in parts in 2018 and fully shuttered in May 2022, citing environmental damage and production exceeding limits. In September 2024, the area, including the port and limestone operations, was designated a protected natural area. Mexican President Claudia Sheinbaum indicated that despite the ruling, the site would remain a protected natural area, and the government is still negotiating with Vulcan regarding site remediation and alternative uses for the Punta Venado port.
Mexico's Economy Ministry (SE) considered the ruling largely favorable, as it significantly limited the country's financial exposure. The case was brought under NAFTA's dispute-resolution mechanisms, which were in effect when the dispute began in 2018, allowing it to proceed under the former agreement despite its replacement by the USMCA in 2020. Vulcan Materials still has the option to appeal the ruling, though the Mexican government has ruled out further legislative changes to its mining laws, focusing instead on existing frameworks and concession recoveries.
