MAC: Mines and Communities

Baljit Chadha's Canadian asbestos gamble

Published by MAC on 2011-10-10
Source: Canadian Press

An Indian-born businessman, resident in Montreal, is trying to throw a lifeline to one of Canada's deadliest exports and worst domestic shames.

Baljit Singh Chadha says he's raised sufficient funding for his eponymous company, Balcorp, to re-open Quebec's Jeffrey chrysotile asbestos mine - even though he's not prepared to name the new investors.

But Mr Chadha may still meet his match - and from the very country where he was born. 

Although he's banking on a main market for his deadly materials in India, there's now a reasonable prospect the Delhi government will soon introduce a blanket ban on all asbestos usage.

Chadha's asbestos gamble

By Graeme Hamilton and Nicolas Van Praet

Financial Post (Canada)

28 September 2011

He has been portrayed as a monster, a businessman with impeccable political connections who sells a product so dangerous it has been banned in Europe and largely shunned on this continent.

But Baljit Singh Chadha says he is simply aiming to make some money while helping the poor improve their lives. And it looks like the Quebec government is about to back him up.

Mr. Chadha is a Montreal entrepreneur and the new face of the asbestos industry in Canada. After acting as the sales agent in India to Quebec's Jeffrey asbestos mine for years, he has put together a plan to buy the bankrupt business and give it new life.

The Liberal government of Premier Jean Charest has committed $58-million in loan guarantees to relaunch the mine, provided Mr. Chadha can show the project can turn a profit, that the asbestos will be used safely in importing countries and that he can find private investors willing to put $25-million into the plan.

A government spokesman Wednesday said the only condition remaining to fulfill is the outside investment.

Mr. Chadha said he has letters of intent from unnamed investors in three countries to put up the equity. He is scheduled to make his case before department officials this week. A final decision is expected as early as next week.

Despite the significant opposition to asbestos mining from the medical community and prominent political leaders who charge the cancer-causing mineral can't be used without causing harm, Quebec has historically supported the industry and its two asbestos mines. A bitter strike by 5,000 workers at Jeffrey in 1949 was a pivotal event that altered politics in the province and presaged the Quiet Revolution. The federal government also backs its export.

Critics say the endorsement is an international embarrassment for Canada. But barring any sudden reversal, Mr. Chadha appears set to resurrect the mine, located, about 125 kilometres east of Montreal.

What's so intriguing about his involvement in asbestos, however, is simply this: He doesn't need the controversy.

A well-connected Liberal and member of Canada's Privy Council, Mr. Chadha is also a rich man and prominent Sikh community leader. Why would he risk his reputation to become a key player in one of the most despised sectors worldwide? Why would he even go so far as to seek personal meetings with the industry's most vocal adversaries as he did this week?

During an interview this week at the Montreal headquarters of his trading company, Balcorp Ltd., Mr. Chadha acknowledged he is dealing in a difficult product. Even his own family members and prospective employees need to be persuaded he is doing the right thing, he said.

"But I have become more convinced that what we are doing is not wrong. In fact, I have become more determined because all of this unnecessary noise and personal attacks [against me] ... We are not the devil as people are portraying us," he said.

His arguments do not wash with asbestos opponents, a growing group that now includes the Canadian Medical Association, Quebec's 18 directors of public health and the Canadian Cancer Society.

New Democrat MP Pat Martin, one of the industry's most strident critics, said he met with Mr. Chadha Monday in Ottawa as a courtesy. But nothing he heard changed his mind about the safety of asbestos exports. "It's just not plausible" that Balcorp will be able to monitor the conditions under which the vast amounts of asbestos to be mined at Jeffrey are used in the developing world, Mr. Martin said.

"The asbestos cartel is the tobacco industry's evil twin. They lie, and they promote junk science," he said. He called the proposed loan guarantee for the project "corporate welfare for corporate serial killers."

Jeffrey mines a form of asbestos known as chrysotile, which its proponents claim is safer than other asbestos varieties. Nevertheless, the European Union has banned it and North America has also largely shunned it.

The main markets for the mineral are India, Vietnam and China, where for years buyers have used it to make inexpensive roof sheeting and pipes. Most railway station roofs and army barracks in India are made with asbestos-reinforced cement, for example. Demand is growing by 5% to 15% a year, according to estimates.

"All these countries are well aware of the risks that are there," Mr. Chadha said. "We all admit and we say that it is a carcinogen. It is a hazardous product. But it can be handled safely."

Mr. Chadha, 59, said barely 10% of his business revenue currently comes from selling asbestos produced by Jeffrey. Most of his sales come from Canadian-produced food stuffs that he sells overseas, primarily nuts, dried fruits and beans.

He gets excited talking about the potential return as his role changes from sales agent to active investor.

Under bankruptcy protection for the past eight years, the mine has been operating on a reduced schedule of between four and 12 weeks annually, producing 20,000 to 50,000 tons of asbestos a year as it exhausts its open-pit reserves. Once an underground expansion is finalized - it is currently about 90% completed - output will grow to a projected 250,000 tons a year.

Mr. Chadha has already plowed millions into the venture to keep Jeffrey alive. There are 30,000 feet of tunnels, shafts and galleries that were built, most of them large enough to drive a truck through.

He calculates the mine will generate $3.4-billion in revenue and at least $400-million in net profit over its 20-year lifespan while employing 500 workers.

Whether people want to admit it or not, chrysotile asbestos provides "a huge socio-economic benefit" to developing countries by giving their residents access to affordable housing, Mr. Chadha argues. Synthetic alternatives to asbestos cost two to four times more, he said.

Banning asbestos mining in Canada outright, as some critics are calling for, would put the government on a "slippery slope" of having to consider outlawing other minerals as well, Mr. Chadha said. He said nickel, which is heavily mined in the Sudbury, Ont. area, is just as dangerous.

Chrysotile is in fact being used in building construction in Canada at the moment, although not extensively. Its uses include fortifying piping systems.

Mr. Chadha predicts chrysotile usage has bottomed out in this country and that it is set for a rebirth. He said there is research being done on how to use it for power transmission as well as using it to strengthen the cement domes of nuclear reactors. The mineral creates tensor strength that helps prevent cracking.

Things could also swing in the other direction.

A document prepared by India's Ministry of Labour and Employment for an India-European Union seminar last week on workplace safety raised the spectre of an Indian ban of chrysotile asbestos. The paper notes that asbestosis, a lung disease associated with the inhalation of asbestos fibres, is a growing menace to Indian workers. It says the Indian government is considering a ban on the use of chrysotile "to protect the workers and the general population."

Harshal Owalekar, manager of business development for Balcorp, downplayed the significance of the document. "We do not think that the Government of India will ban chrysotile cement sheets and pipes as it will have a huge negative impact on its goal of providing affordable housing for the poor people," he said.

Still, public opposition to asbestos could grow. Jeffrey has already been skewered in an episode of the popular comedy program The Daily Show with Jon Stewart. Critics are growing louder, not quieter.


Uncertainty continues in fate of Quebec asbestos mine

Canadian Press

3 October 2011

QUEBEC - The uncertainty surrounding a project to save one of Canada's last asbestos mines will last a little longer.

The Quebec government had been set to decide last weekend whether to approve a $58-million loan guarantee for the Jeffrey Mine.

The deadline has already been pushed back several times and now the government says it hopes to have the matter resolved before the Christmas holidays.

The issue is a controversial one, with critics accusing the asbestos industry of causing cancer deaths in the poor countries where Canada exports the substance.

But defenders insist the product can be handled safely.

Meanwhile, the only other remaining asbestos mine in Canada announced its shutdown over the weekend.

With the mine mostly tapped out, production is being suspended at Lac d'amiante of Thetford Mines, Que., and 350 workers will be without jobs, unless mine officials can figure out how to get at deposits beneath an old highway.

We have the $25-million, Quebec firm says of asbestos plan

By Julian Sher

Globe and Mail

26 September 2011

A year ago, over a lunch of oysters and fine wine at a posh downtown restaurant, Baljit Chadha held himself out as the potential saviour of Quebec’s faltering asbestos industry. This week, he plans to deliver.

Days before a provincial government deadline this Saturday to find private funding for the Mine Jeffrey in Asbestos, Que., the wealthy and well-connected Montreal businessman says he has “letters of intent” from unnamed investors in three different countries – enough to breathe new life into an export trade critics decry for causing death.

“I have done a lot of soul-searching on this and have come to a conclusion that we are not exporting death,” said Mr. Chadha, who combines an almost evangelical fervour for asbestos with the clout needed to pull off his controversial plan.

Mr. Chadha, whose company already handled much of the mine’s asbestos sales to his native India, offered to buy the mine outright in August of 2010, for “tens of millions.” But to clinch the deal, he had to secure an additional $25-million from outside investors while the Quebec government kept the mine afloat with a $58-million loan guarantee.

“Yes we have the $25-million,” he told The Globe and Mail.

If Quebec approves his investment plan, he hopes to ramp up annual export sales from the sprawling but largely unused mine to at least $150-million within two years. He projects $3.4-billion in sales over the next two decades.

That’s a prospect that appalls health experts who note that last spring Canada stood virtually alone in blocking a proposed United Nations treaty that would have added asbestos to a list of hazardous materials restricted worldwide.

“Asbestos is causing death and it can be prevented by stopping the export of it,” said Paul Lapierre, the vice-president of public affairs for the Canadian Cancer Society

Mr. Chadha came to Canada in 1973 to study science and business. Three years later, he set up Balcorp, an international trading company that today sells more than $100-million worth of Canadian goods to India annually – including between $5-million and $15-million in asbestos products.

A staunch Liberal, Mr. Chadha was appointed to the Privy Council of Canada in 2003 by then-prime minister Jean Chrétien to serve on the committee that oversees the Canadian Security Intelligence Service.

In 2009, he held a private fundraiser in his Westmount home for Quebec Premier Jean Charest but he insists “we have never ever asked for any business favours from any government.”

For more than a decade, he has accompanied prime ministers and premiers on every major trade mission to India, which last year accounted for more than half of Canada’s 135,000 tonnes of asbestos sales.

And it is in his native India where Mr. Chadha faces his fiercest opposition.

“When most of the world, including Canada, has either banned or restricted the use of asbestos domestically due to health reasons, it’s hypocrisy bordering on racism to expose people from poorer countries to harm knowingly,” said Madhumita Dutta of the Occupational and Environmental Network of India, one of the groups that organized noisy protests when Mr. Chadha accompanied Mr. Charest on a 2010 trip to the subcontinent to promote the province’s exports.

Mr. Chadha, like other defenders of the modern asbestos industry, says the white chrysotile product of today – tightly “bonded” to reinforce cement in roofing sheets – is much safer than the loose, amphibole asbestos widely used in the past as insulation.

He says asbestos provides inexpensive roofing to India’s neediest people and vows that independent health investigators will monitor his customers there. But opponents say poor safety standards and the difficulty of tracking tons of asbestos products cast serious doubt on those promises.

Even Mr. Chadha acknowledges he has a tough sale. “I have to commend our enemies, they’ve done a fantastic job,” he said. “And I have to change that image.”

Monday, he sat down for a tense hour-long encounter on Parliament Hill with NDP backbencher Pat Martin, one of the harshest critics of Canada’s asbestos trade.

“I told him to his face that his business is morally and ethically reprehensible,” said Mr. Martin, who worked for two years in a Yukon asbestos mine back in the 1970s. “The jig is up for asbestos in this country. Mr. Chadha is the last man standing and he shouldn’t get any corporate welfare for a dying, deadly industry.”

But Mr. Chadha remains undaunted and plans to meet with the Canadian Cancer Society next month to continue his campaign.

“There have been times where with all the missiles that are being thrown at me you think: am I doing the right thing?” he said. “I have a very clear conscience. I don’t feel shame at all.”

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