Australian asbestos compensation fund at risk of drying up

An asbestos compensation fund set up by a building materials company for asbestos victims in Australia is reportedly in danger of running out of money.

James Hardie - the company that set up the fund in 2006 - said that it expects the government of the state of New South Wales to contribute to the fund before it runs out, according to the Australian Associated Press.

The fund was established to provide asbestos compensation to those who have been afflicted by illnesses caused by exposure to the naturally occurring substance, such as malignant mesothelioma, asbestosis and lung cancer. James Hardie had paid into the fund each year through its free cash flow.

"The fund is, I understand, in discussions with the NSW government about a likely drawdown under the facility that was established by the NSW government with assistance with the Commonwealth," James Hardie chief financial officer Russell Chenu told the news source.

The arraignment between the company and the government was reportedly made last December.

In the second quarter of 2011, the fund paid about $25.1 million in asbestos compensation to victims, reports the news provider.