Today Paradigm Shift [4ZZZ fm 102.1, Fridays at Noon] is talking with chairman of the board of BHP Billiton, Jac Nasser.
PShift: Please introduce yourself.
Jac Nasser: My name is Jac Nasser. I was born in Lebanon and came to Australia when I was a boy. I have spent a life in business. I was previously CEO of the Ford Motor Company before I took a post on the board of BHP Billiton. I am currently its chairman.
PShift: Why has BHP cancelled its staff Christmas parties this year, including the one in Melbourne?
Jac Nasser: Out of respect for those who lost their lives in the Samarco dam disaster in Brazil. Instead we are donating Christmas hampers to those affected.
PShift: Mining giants BHP, Fortescue Metals and Rio Tinto have all had a pretty bad year, haven’t they?
Jac Nasser: Yes the price of both iron ore and oil are down this year. The price of iron ore, which contributed 80% of BHP’s earnings last year, has fallen to $45 a ton down from $75 a ton a year ago.
PShift: What caused the disaster at the iron ore mine in Brazil with loss of life and thousands homeless and now without income from the fishery on the Doce river?
Jac Nasser: We don’t really know. All we know is two tailings dams collapsed, we will have to wait and see what the official investigation reveals. I want to reemphasise that we are deeply sorry to everyone who has and will suffer from this terrible tragedy.
PShift: BHP had is annual general meeting after the disaster in Brazil and both yourself and the CEO Andrew Mackenzie were up for re-election, why didn’t you offer your resignation?
Jac Nasser: Why? Our core values have not changed. We are putting health and safety first, being environmentally responsible and supporting our communities.
PShift: Greenpeace Brazil say that the mining disaster is ruining the lives of thousands — fishermen, ranchers, city-dwellers and the Krenak Indigenous people.
Jac Nasser: We are doing what is right and doing what we say we will do. We are providing bottled water to those affected on the ground in Minas Gerais state. I want to stress that responsibility for the accident lies with Samarco, a limited liability company BHP owns in equal parts with Vale, the Brazilian mining giant.
PShift: Yet Carlos Cordeiro, recently resigned at the end of the annual general meeting in Perth.
Jac Nasser: The two events are not related. I would like to recognise the contribution of Carlos Cordeiro and give thanks to Carlos, a talented banker, on behalf of the Board and shareholders, for the significant role he played over the past 11 years.
PShift: Ordinary Brazilians are calling for the government to put the directors of Samarco in jail.
Jac Nasser: I stress I am the chairman of BHP Billiton not Samarco.
PShift: Will BHP be cutting its annual dividend to shareholders?
Jac Nasser: Over my dead body, we aim to generate enough cash flow each year not only to cover our costs, but also to fund new investment and shareholder payout, without going too much further into debt.
PShift: Were there toxic elements in the tsunami of mud and mine waste unleashed in the Nov. 5 dam break?
Jac Nasser: As far as we know the run-off from the burst dams contains water, mud, iron-oxide and sand, none of which are harmful.
PShift: Yet a United Nations report and Minas Gerais state Institute of Water Management both say there are high levels of toxic heavy metals and other toxic chemicals including mercury, lead and arsenic in the mud flowing down the river?
Jac Nasser: When the dam breaks and that stuff washes out the banks of the river, it could have picked up some kind of material that was already present, from the most diverse of origins, but they’re all materials present in nature.
PShift: But the State Institute of Water has contradicted its own government saying that Arsenic, which can cause skin lesions, liver disease and cancer, was detected at as much as 108 times the legal maximum. Lead, which can cause brain damage, was measured at as much as 165 times the legal maximum. Copper, linked to gastrointestinal problems, was at as much as 75 times the limit. Chromium, which can cause gastrointestinal disorders and hemorrhaging, was at as much as 57 times the limit.
Jac Nasser: It is early days yet. Our research shows that a dam break may have upset toxic elements in the Rio Doce riverbed or along its banks. Our preliminary findings show that no toxic elements were present in the mud released by the dam break.
PShift: Do you envisage a long legal battle with claimants over the disaster?
Jac Nasser: Authorities and courts will have our full co-operation. However we have a duty to protect the interests of our shareholders. I remind your listeners that Mariana, where Samarco’s dam stood is dependent on the mining industry for local job creation and tax revenue. Mariana depends on mining for 80% of its revenue, that is a reality which should not be ignored.
PShift: So people and government are hostage to the mining industry, I think we will have to leave it there.