UPDATE 2-Texas sues Mexico's Cemex for $558 million

* Texas says Cemex owes at least $558 mln in royalties

* Lawsuit latest concern for debt-laden Mexican company

* Cemex says sand, gravel not subject to royalties (Recasts; adds background, Cemex debt details)

By Robin Emmott

MONTERREY, Mexico, June 23 (Reuters) - The U.S. state of Texas said on Tuesday it filed a lawsuit against Mexico's Cemex SA for $558 million in royalties owed in the United States, the latest headache for the debt-laden cement maker.

Texas Land Commissioner Jerry Patterson said Cemex (CMXCPO.MX)(CX.N), the top cement maker in the United States, was mining a quarry near El Paso, Texas, without paying royalties to the owner, the state's Permanent School Fund.

"Since the 1940s, Cemex and its predecessors have mined and extracted the minerals in McKelligon Canyon mine," Patterson said in a statement. "Texas never authorized Cemex to take its minerals."

Patterson, who presented the suit in the district court of El Paso on Monday, said the state is also seeking an injunction to stop Cemex working at the site in the Franklin Mountains.

Texas says Cemex, which operates in more than 50 countries, owes royalties on 100 million tons of "valuable rocks and building materials" amounting to at least $558 million.

Monterrey-based Cemex denied the accusations and said it was not required to pay royalties on aggregates, limestone and other rocks used to make cement.

"We are led to believe that this lawsuit is purely a tactic, as the suit itself is completely lacking in merit as the materials extracted by Cemex and its predecessor companies do not meet the legal definition for a royalty obligation," the company said in a statement.

Patterson, who is running for political office in Texas next year, said he was defending "school kids' assets."

The suit is the latest worry for Cemex, which took on large debts just before the U.S. housing crisis and ensuing global financial debacle and is refinancing $14.5 billion in debt.

Cemex, which bought Australia's Rinker in 2007 using big short-term loans, needs to repay $4.1 billion in debt by the end of the year and has more loans maturing in 2010 and 2011.

The company, which competes with France's Lafarge SA (LAFP.PA) and Switzerland's Holcim Ltd (HOLN.VX), is also struggling with slumping sales in its key U.S. and European markets, cutting its cash flow.

Cemex, once a darling of emerging markets for its acquisitive growth, is under investigation for possible collusion between big building materials companies in Mexico and Europe. The company denies any wrongdoing.

Cemex lost its lucrative Venezuelan operations last year when socialist President Hugo Chavez ordered the nationalization of its assets. It is fighting to win compensation at an international tribunal. (Additional reporting by Gabriela Lopez, editing by Gerald E. McCormick)