Mining magnate German Larrea’s rail unit said on Sunday that it was seeking an agreement with the government after the military seized a small stretch of a rail line that’s crucial to one of the president’s pet projects.

Grupo Mexico Transportes SAB said in a statement that it was still in talks with authorities and continues to analyze what actions it could take. The company said that it was “surprised” by Friday’s decree that deemed a section of track in the state of Veracruz “of public utility.” 

German Larrea

“If an agreement is not reached in the negotiation, the temporary occupation will become definitive, in prejudice to company, its employees, customers, and the free market,” according to the statement.

The dispute comes as President Andres Manuel Lopez Obrador battles with the nation’s high court. Last week, Supreme Court justices rejected his bid to provide “national security” protections to his priority public works projects. The president responded by issuing a similar, new decree to circumvent the high court ruling.

The 120 kilometers (75 miles) of rail line that was taken over is part of a project to connect ports on either side of the Isthmus of Tehuantepec, a relatively narrow strip of land that separates the Pacific Ocean and Gulf of Mexico. 

Larrea’s Grupo Mexico SAB is in advanced talks to purchase Citigroup Inc.’s Mexican retail bank. The country’s top business lobby said Saturday the government’s move against Grupo Mexico could hurt investor confidence in the country.