MAC: Mines and Communities

James Hardie Says To Continue Funding For Victims

Published by MAC on 2004-08-17

James Hardie says to continue funding for victims

Reuters News Service

August 17, 2004

Sydney - James Hardie Industries Ltd.said it would ensure ongoing compensation for victims of asbestos diseases caused by materials once sold by the Australian building products company.

A government probe into asbestos claims heard victims might need compensation of more than A$2.2 billion ($1.6 billion), well above the amount set aside by James Hardie that was expected to run out in less than three years.

In a statement to the Australian Stock Exchange on Friday, James Hardie said it would ask its shareholders "to approve a scheme which would apply to all persons who might have claims from time to time against" former group companies because of asbestos-related diseases.

Australia has the world's highest level of per-capita deaths from mesothelioma, a fatal lung disease caused by exposure to asbestos, once used as a fire-retardant in wallboards and other products before the country banned it in 1984.

James Hardie "recognises the possibility that the number of legitimate claimants may ultimately exceed" earlier estimates and that "any scheme will have to accommodate that possibility and that those additional claims would have to be funded," the statement said.

About 3,000 Australians have received compensation for exposure to asbestos-tainted products. An expert report submitted to the inquiry said almost 8,000 more victims could come forward with asbestos-related cancers in the next 40 years.

The inquiry was launched to investigate the company, which now makes 79 percent of its sales in the United States, over a potential shortfall in the fund it set up for victim compensation.

Hardie established the Medical Research and Compensation Fund in 2001 with A$293 million to compensate victims linked to asbestos products made by two former Hardie subsidiaries. Eight months later, it moved its headquarters to the Netherlands, citing a better tax regime.

On Tuesday, James Hardie reported profit in the three months ended June 30 rose 13 percent to $37.1 million from the year-earlier $32.9 million.

Hardie's share price closed on Friday up 0.6 percent at A$5.14. On Thursday, the shares touched a 52-week low of A$5.03.

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