Vulcan Facility Seizure Adds to Tension Between US, Mexico

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(Bloomberg) -- The seizure of a US company’s marine terminal in Mexico has drawn criticism from a US senator and risks sparking more tension between the two nations amid spats over energy and security.

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US construction firm Vulcan Materials alleges that armed forces, including from the Mexican government, launched a takeover of its facility in the country’s southeast on Tuesday. The company says a federal judge in Mexico has ordered a stay on any government effort to confiscate the property. That order could not be independently verified.

The White House said it was aware of the reports and always concerned about the fair treatment of US companies, according an official with the National Security Council who requested anonymity to discuss the matter. US officials have told their Mexican counterparts that a failure to abide by trade obligations had the potential to impact efforts to attract future investments, the spokesperson said.

Republican Senator Bill Hagerty of Tennessee said reports of a takeover of Alabama-based Vulcan Materials’ terminal “add to the trend of misguided and counterproductive behavior” by Mexico’s President Andres Manuel Lopez Obrador. In a statement on Saturday, he urged the Biden administration to “engage immediately” over the incident.

The Vulcan terminal’s operations have been shut down since last year in a feud with Lopez Obrador, who accused the company of extracting materials without the proper permits.

What exactly happened last week remains murky. The Mexican government has made no statement about the seizure. Vulcan has said it is “shocked” that Mexican forces and personnel from the cement giant Cemex took over the facility. On Sunday, Reforma newspaper published video footage showing police cars and vehicles branded with Cemex’s logo entering the plant.

The Mexican government and Cemex didn’t immediately respond to requests for comment on Sunday. Vulcan shares rose 1.3% to $163.17 at 10:27 a.m. in New York.

Earlier this month, Lopez Obrador decried the “arrogance” of Republican lawmakers calling for US troops to bring security to Mexico after a cartel kidnapped four Americans, killing two of them. The two countries are also embroiled in a trade dispute over Lopez Obrador’s nationalist energy policy, with US businesses pushing President Joe Biden to “use every tool” to win the case.

--With assistance from Eric Martin.

(Updates with White House comment in third paragraph.)

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