UPDATE 1-Texas sues Mexico's Cemex for $558 million

(Updates with case details, quotes)

MONTERREY, Mexico, June 23 (Reuters) - The U.S. state of Texas said on Tuesday it filed a lawsuit against Mexican cement maker Cemex for mining royalty payments owed in the United States worth $558 million.

Texas Land Commissioner Jerry Patterson said Cemex (CMXCPO.MX: Quote, Profile, Research)(CX.N: Quote, Profile, Research), the top cement maker in the United States, mined a quarry near El Paso, Texas, without paying royalties to the mineral 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."

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. (Reporting by Robin Emmott and Gabriela Lopez; editing by Andre Grenon)