Members of the US Senate denounced before the president Joe Biden the closure of activities of the limestone mine Vulcan Materialswhich could contain lithium and therefore already faces arbitration against the Mexican government under the protection of the previous trade agreement NAFTAbut may initiate legal action also within the framework of the updated pact USMCAfor discrimination and harassment by the administration of the president Andres Manuel Lopez Obrador.
And it is that the actions against this limestone mine further highlighted by the recent approval by the Mexican Senate of a bill to nationalize lithium mining and extraction. Under this protectionist measure, Mexican state-owned companies will have exclusive rights to extract lithium, which is a critical mineral used in the production of batteries for electric cars and other next-generation technologies.
In a letter addressed to the president of the neighboring country to the north, 10 senators: Bill Hagerty, Rick Scott, Roger F. Wicker, Ted Cruz, Marco Rubio, Richard Shelby, Tommy Tuberville, Bill Cassidy, Roger Marshall and John Cornyn, presented the case that once again represents a disagreement between the current administration and the American business community.
We write to you urging you to prioritize and address the recent aggression by President Andrés Manuel López Obrador and his administration toward US companies with investments and operations in Mexico.
They denounced that for more than 30 years, the American company Vulcan Materials Company has operated a limestone quarry on three contiguous lots in Quintana Roo and this facility has brought investment and well-paying jobs to the region. But in the administration of President López Obrador, the Mexican government has taken numerous arbitrary measures and punitive measures against this firm, illustrating increasingly protectionist and anti-competitive policies that ignore the rule of law.
So since 2018, Vulcan initiated arbitration proceedings under the FTA (NAFTA) against Mexico due to actions that it considered arbitrary by being prohibited from operating in two of the three parcels it owns in Quintana Roo. And in January of this year, President López Obrador began escalating hostilities, directly interfering with Vulcan’s ability to export materials and making numerous public statements advocating that Vulcan end its extractive activities. Then, on May 5, the Mexican government presented Vulcan with closure orders to immediately cease all exploitation and extraction operations on its only active mining parcel, despite the fact that Vulcan fully owns this property and holds all the permits. necessary to operate, they denounced.
“A continued closure of Vulcan’s operations in Mexico will have a direct and negative impact on the United States, as the Vulcan facility in Mexico is a critical component of the construction aggregates supply chain in the southeastern United States. This mine provides construction aggregates for infrastructure projects in coastal markets that do not have the necessary geology to locally produce quality construction aggregates,” they explained.
They mentioned that over two centuries, the United States and Mexico have developed deep cultural, economic, and diplomatic relationships that have been instrumental in creating prosperity in North America. Thus, a central component of this relationship is economic integration that encourages US investment and trade with Mexico, which, in 2021, generated more than $661.1 billion in total trade.
Therefore, they felt that as the world emerges from the pandemic and reassesses the global rebalancing of supply chains, North America is in a unique position to reinforce its leadership as a manufacturing powerhouse as companies look to strengthen their supply chains. supply against Asia and the rest of the world.
However, the recent actions of President López Obrador and his government officials threaten to undermine the confidence of US companies in Mexico as a market and investment destination with certainty.
Finally, they pointed out that Vulcan Materials is not the only US entity suffering from harassment by the Mexican government and the one they called and anti-business rhetoric from AMLO.
Among others, the acts already denounced by the Natural Resources Defense Council, the Alliance for Trade Enforcement, the United States Chamber of Commerce, and the National Association of Manufacturers stand out.
“If these violations are allowed to continue, they will undermine crucial and mutually beneficial economic cooperation between our nations and encourage companies to seek more predictable and suitable markets elsewhere,” they concluded.