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City Reacts to Bureau of Land Management's Decision to CEMEX Requesting in Lieu of Production Payments

Post Date:12/09/2019

CITY REACTS TO BUREAU OF LAND MANAGEMENT’S DECISION TO CEMEX REQUESTING IN LIEU OF PRODUCTION PAYMENTS
Failure to Respond Would Result in Termination of Contract

More than $25 million - that is how much the Bureau of Land Management (BLM) claims is owed to them by CEMEX Corporation. In a pair of decisions sent on Friday, December 6, 2019, addressed to CEMEX, INC., BLM states for each of the two mining contracts no actual production has occurred and no annual payments in lieu of production were made. Annual in lieu of production payments were due on or before the anniversary date of the execution of the contract. To date, CEMEX has not paid any in lieu of production payments.

The decisions state, “CEMEX has a contractual and legal obligation to produce material or to make annual payments in lieu of production…CEMEX’s failure to comply with the terms and conditions of producing mineral material or making timely in lieu payments is contrary to the terms of the contract and in violation of federal regulation.” If CEMEX fails to respond to the notice within 30 days, “BLM will consider CEMEX to be in breach of contract, and the contract will be canceled or terminated for default.”

“Hearing the words ‘canceled’ or ‘terminated’ in regard to CEMEX is always good news,” said Councilmember and CEMEX City Council Ad Hoc Committee member Bob Kellar. “We will remain vigilant and see how this most recent development plays out, but this is definitely another win in what has been a two-decades-long battle to prevent mega-mining in our community.”

For the initial 10-year contract, which expired in 2010, BLM states that the total amount owed to the United States in lieu of production payments is $7,000,000. For the second contract, set to expire on July 31, 2020, BLM asserts that the contract is now in its ninth year, meaning that nine payments in lieu of production are due, totaling $18,972,000. Combined, the BLM is requesting a total of $25,972,000 in payments from CEMEX.

“This is another major advancement in ensuring that our beautiful, natural landscape is not ravaged by mega-mining,” said Councilmember and CEMEX City Council Ad Hoc Committee member, Laurene Weste. ”This fight is not officially over, and we are dedicated and committed to seeing this battle to conclusion. This community has worked for many years with strong leadership to prevent this mega-mine from becoming a reality in our Valley. We will continue to protect our air and water quality, as well as the health and high quality of life our residents appreciate.”

This recent development is the latest in what has been a 20-year-long battle over mining rights in Soledad Canyon. The City of Santa Clarita has been fighting to prevent mining in Soledad Canyon since the CEMEX contracts were issued by the federal government in 1990. The CEMEX contracts would have allowed for the mining of 56 million tons of sand and gravel from Soledad Canyon, which would have added up to 1,164 truck trips a day to local roads and freeways. This would have caused air quality issues and potential negative impacts to the Santa Clara River, the San Gabriel Mountains National Monument, and wildlife corridors connecting the Angeles National Forest, as well as fish, wildlife and plants in the area.

            The City of Santa Clarita would like to thank all of our partners who fought and continue to fight to protect our community from mega-mining.

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