building a STRONGER foundation - Cemex

To prevent, control and remediate environmental problems and maintain compliance with regulatory requirements, we maintain
an environmental policy designed to monitor and control environmental matters. Our environmental policy requires each subsidiary to
respect local laws and meet our own internal standards to minimize the use of non-renewable resources and the generation of
hazardous and other wastes. We use processes that are designed to reduce the impact of our operations on the environment throughout
all the production stages in all our operations worldwide. We believe that we are in substantial compliance with all material
environmental laws applicable to us.
We regularly incur capital expenditures that have an environmental component or that are impacted by environmental
regulations. However, we do not keep separate accounts for such mixed capital and environmental expenditures. Environmental
expenditures that extend the life, increase the capacity, improve the safety or efficiency of assets or are incurred to mitigate or prevent
future environmental contamination may be capitalized. Other environmental costs are expensed when incurred. For the year ended
December 31, 2007, our environmental capital expenditures were not material. For the year ended December 31, 2009 and 2010, our
sustainability capital expenditures (including our environmental expenditures and investments in alternative fuels and cementitious
materials) were approximately U.S.$77 million and approximately U.S.$93 million, respectively. However, our environmental
expenditures may increase in the future.
The following is a discussion of environmental regulations and related matters in our major markets.
Mexico. We were one of the first industrial groups in Mexico to sign an agreement with the Secretaría del Medio Ambiente y
Recursos Naturales, or SEMARNAT, the Mexican government’s environmental ministry, to carry out voluntary environmental audits
in our 15 Mexican cement plants under a government-run program. In 2001, the Mexican environmental protection agency in charge
of the voluntary environmental auditing program, the Procuraduría Federal de Protección al Ambiente, or PROFEPA, which is part
of SEMARNAT, completed the audit of our 15 cement plants and awarded all our plants a Certificado de Industria Limpia, or Clean
Industry Certificate, certifying that our plants are in full compliance with environmental laws. The Clean Industry Certificates are
strictly renewed every two years. As of the date of this annual report, our cement plants have Clean Industry Certificates or are in the
process of renewing them. We expect renewal of all currently expired Clean Industry Certificates.
For over a decade, the technology for recycling used tires into an energy source has been employed in our Ensenada and
Huichapan plants. By the end of 2006, all our cement plants in Mexico were using tires as an alternative fuel. Municipal collection
centers in Tijuana, Mexicali, Ensenada, Mexico City, Reynosa, Nuevo Laredo and Guadalajara currently enable us to recycle an
estimated 10,000 tons of tires per year. Overall, approximately 9.1% of the total fuel used in our 15 operating cement plants in Mexico
during 2010 was comprised of alternative fuels.
Between 1999 and April 30, 2011, our operations in Mexico have invested approximately U.S.$54.93 million in the acquisition
of environmental protection equipment and the implementation of the ISO 14001 environmental management standards of the
International Organization for Standardization, or ISO. The audit to obtain the renewal of the ISO 14001 certification took place
during February 2010. All our operating cement plants in Mexico have obtained the renewal of the ISO 14001 certification for
environmental management systems.
United States. CEMEX, Inc. is subject to a wide range of U.S. Federal, state and local laws, regulations and ordinances dealing
with the protection of human health and the environment. These laws are strictly enforced and can lead to significant monetary
penalties for noncompliance. These laws regulate water discharges, noise, and air emissions, including dust, as well as the handling,
use and disposal of hazardous and non-hazardous waste materials. These laws also create a shared liability by responsible parties for
the cost of cleaning up or correcting releases to the environment of designated hazardous substances. We therefore may have to
remove or mitigate the environmental effects of the disposal or release of these substances at CEMEX, Inc.’s various operating
facilities or elsewhere. We believe that our current procedures and practices for handling and managing materials are generally
consistent with the industry standards and legal and regulatory requirements, and that we take appropriate precautions to protect
employees and others from harmful exposure to hazardous materials. See “Item 3 — Key Information — Risk Factors — Our
operations are subject to environmental laws and regulations.”
As of April 30, 2011, CEMEX, Inc. and its subsidiaries had accrued liabilities specifically relating to environmental matters in
the aggregate amount of approximately U.S.$27.6 million. The environmental matters relate to (i) the disposal of various materials, in
accordance with past industry practice, which might be categorized as hazardous substances or wastes, and (ii) the cleanup of sites
used or operated by CEMEX, Inc., including discontinued operations, regarding the disposal of hazardous substances or wastes, either
individually or jointly with other parties. Most of the proceedings are in the preliminary stages, and a final resolution might take
several years. For purposes of recording the provision, CEMEX, Inc. considers that it is probable that a liability has been incurred and
the amount of the liability is reasonably estimable, whether or not claims have been asserted, and without giving effect to any possible
future recoveries. Based on information developed to date, CEMEX, Inc. does not believe it will be required to spend significant sums
on these matters, in excess of the amounts previously recorded. The ultimate cost that might be incurred to resolve these
environmental issues cannot be assured until all environmental studies, investigations, remediation work, and negotiations with or
litigation against potential sources of recovery have been completed.
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