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CEMEX wins in court, Judge rejects State's $558 M royalty claims for mining at McKelligon Canyon

HOUSTON – December 22, 2009

CEMEX USA announced today that Judge Carlos Villa has ruled in favor of CEMEX and against the State of Texas and the General Land Office (GLO) for pursuing a suit against CEMEX threatening to shut down its operations and seeking $558 million in royalties and the full value for the removal and sale of sand and gravel at CEMEX’s McKelligon Canyon operation in El Paso County. The ruling rejects the State’s case against CEMEX and affirms that CEMEX has every right to remove and sell sand and gravel at its operations.

Judge Villa ruled from the bench that sand, gravel, limestone, granite, caliche and soil are not minerals reserved to the State and that the State cannot require CEMEX to pay royalties for their removal at the company’s McKelligon Canyon quarry.

"This ruling confirms our view that the suit by the State of Texas and the General Land Office is completely lacking in merit," said Gilberto Perez, President of CEMEX USA.

In June, Texas GLO Commissioner Jerry Patterson accused CEMEX of trespassing on its own land and not paying the State for the removal and sale of more than 60 years of sand and gravel at the site by CEMEX and its predecessors. The GLO’s suit sought $558 million from CEMEX in alleged unpaid royalties and also the full value of the sand and gravel. Significantly, the State did not attempt to pursue royalty payments for sand and gravel from any predecessor of CEMEX and only began this course of action in 2006 after CEMEX acquired the operations.

CEMEX’s evidence showed that the GLO’s allegations were contrary to Texas Supreme Court rulings and Texas Attorney General opinion. This case potentially affects other Texas landowners of mineral-classified lands. The ruling protects the rights of these surface owners to the sand, gravel, limestone, granite, caliche and soil on their property.

CEMEX is a global building materials company that provides high quality products and reliable service to customers and communities in more than 50 countries throughout the world. The company has a rich history of improving the well-being of those it serves through its efforts to pursue innovative industry solutions and efficiency advancements and to promote a sustainable future. For more information, visit www.cemexusa.com.