Metalclad Expands in Mexico Despite Expropriation Tiff

A Newport Beach hazardous-waste handler embroiled in an expropriation claim against the government of Mexico says it is not letting one little $90-million tiff stand in the way of other business opportunities down south.

Metalclad Corp. claims that the government of the Mexican state of San Luis Potosi illegally seized a hazardous-waste site from it just as the facility was set to open in 1995.

But late last month, the company said it will spend $10 million to build a new facility in the state of Aguascalientes, about 350 miles from Mexico City.

And on Monday, Metalclad President Grant Kesler said the company is about to close a deal for a second--or third, depending on whether you count San Luis Potosi--hazardous-waste disposal site in central Mexico.

Metalclad, which operates in Mexico through a subsidiary, also runs a waste pickup and disposal service in nine Mexican industrial regions.

“We’ve had a number of very positive dealings in Mexico since 1994,” said Kesler. “We’re not going to let one negative deal interfere with the successes we’ve had and are going to continue having.”

In its fight over the San Luis Potosi property, Metalclad became the first business in the United States to file a claim against Mexico under terms of the North American Free Trade Agreement.

The case, filed in January 1997, has been delayed by fights over the adequacy of the Mexican government’s responses to Metalclad’s claim.

Even though Metalclad alleges that its landfill was seized by the former governor of a single state in Mexico, NAFTA doesn’t allow it to prosecute its case against that state. Instead, the company had to file its claim against the Mexican government.

John O’Dell covers major Orange County corporations and manufacturing for The Times. He can be reached at (714) 966-5831 and at john.odell@latimes.com