Dáil Éireann debate -
Wednesday, 29 Jul 1953

Vol. 141 No. 6

Committee on Finance. - Vote 50—Industry and Commerce.

Minister for Industry and Commerce (Mr. Lemass)

I move:—

That a supplementary sum not exceeding £58,500 be granted to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1954, for the Salaries and Expenses of the Office of the Minister for Industry and Commerce, including certain Services administered by that Office, and for payment of certain Subsidies and sundry Grants-in-Aid.

The first of these two Supplementary Estimates relates to payments to Mianraí Teoranta for prospecting. It is, perhaps, necessary to explain how the need for the Supplementary Estimate arose. In May of last year the Government decided to increase the expenditure authorised upon mineral investigation work at Avoca, County Wicklow, to £289,000. When the Estimate for the Department was being prepared it was understood that the actual expenditure to the end of the financial year—that is to 31st March last—would be £262,500, leaving an amount available for the current financial year in accordance with the Government's decision, of £26,500 and that is the amount which appeared in the Book of Estimates. It was clear, however, that the exploration of theminerals at Avoca would not be brought to a satisfactory stage without further expenditure beyond the original provision, and the Minister for Finance indicated in his Budget statement that additional expenditure was foreseen and that a Supplementary Estimate would be required.

Subsequently, Mianraí Teoranta submitted proposals for the completion of the mineral exploration scheme at Avoca involving the expenditure of an additional £100,000 and based mainly on the utilisation of diamond drilling. The Government decided that the exploration work should proceed but that the scheme of exploration prepared by Mianraí Teoranta should be amended so as to ensure the retention in employment of the maximum number of men with mining experience, as it was appreciated that the availability in the area of men with mining experience would facilitate the commercial development of the minerals later.

The Government's decision was that, if and when expenditure reached the limit of £100,000, a further report on the progress of the investigation should be submitted to it. It may be asked, however, why, if the Government has decided on the recommendation of Mianraí Teoranta that additional expenditure amounting to £100,000 be undertaken on the exploration work at Avoca, this Estimate only provides for a total of £85,000 for that work. The answer is that the Minerals Company Act of 1947—the Act which set this whole investigation in progress —provided for an overriding limit on expenditure on minerals exploration work of £85,000 a year. That Act is due to expire on the 31st March next, in any event, and between this and then, consideration is to be given as to the question of whether its renewal is necessary. It is not clear that it is necessary to continue the Act to enable this work to proceed. That legal position is being examined. As the position stands, however, with the Act in operation, there is a limit to expenditure of £85,000 and if expenditure should run up to the £100,000 of which the Government has approved then a further Supplementary Estimate maybe required during the present financial year.

Mr. Sweetman

But I thought you could only spend £85,000?

Mr. Lemass

It is not clear whether that Act would have to be amended or whether the authority of the Appropriations Act should be sufficient for the expenditure. The total expenditure which was incurred on this scheme at Avoca up to the 31st March last was £262,500 and another £100,000 is now to be provided bringing the total cost of the exploration work to £362,500.

The House will naturally ask: What are the prospects of recovering that money? All I can say is that we are advised by the experts who are employed by Mianraí Teoranta to help them in this work that if the exploration establishes the existence in Avoca of ores to the extent of approximately 12,000,000 tons, then commercial working of these ores will be feasible and the repayment of the cost of exploration may confidently be expected. Investigations to date have proved the existence of approximately half the quantity of ore, the existence of which it is necessary to establish before commercial working can be contemplated, and the consulting geologists whose services are available to Mianraí Teoranta have recommended that the results of the work to date make it clear that the area is well worthy of further investigation. In their view the speculative element has largely been removed and there is confidence that further exploration which will be partly by additional tunnelling and partly by diamond drilling will establish the existence of the total tonnage necessary to make the project a commercial prospect.

I should make it clear that the actual expenditure to the end of the exploration stage may in fact run beyond the £100,000 that was the estimate of the cost of the completion of this scheme prepared by Mianraí Teoranta and based mainly upon the diamond drilling. The modification of that scheme consequent on the Government's decision may raise the costbeyond that limit, but, in fact, expenditure as I explained, will not be incurred beyond that limit unless the Government is satisfied that it is justified on the basis of reports then made by the company and its consulting geologists on the results achieved.

Mr. Sweetman

We changed rather punctually at 6 o'clock—I think a few minutes before it.

An Ceann Comhairle

Oh, no.

Mr. Sweetman

According to my watch anyway. But the clock in this House is like the Chair; it is always right.

An Ceann Comhairle

The clock is in order.

Mr. Sweetman

I did not quite get the beginning of the Minister's speech as a result. I want to be quite clear as to the exact proposition being put before us. As I understand it, the Minister has told us that there is now an expert's report before him which has been considered by the Government. It says that certain further work of exploration can usefully be done, and that that work in terms of volume, if you like, is fixed partly so far as the cost is concerned. While it is believed it may be £100,000, the Minister cannot specify for certain that it is not going to exceed that sum, nor that it is going to come completely up to that figure.

If I understand the Minister correctly he is telling the House that the experts concerned have indicated that certain work has to be done, and it is that work, and that work alone, which is necessary for the purpose of arriving at a decision whether there is sufficient volume of mineral available to make commercial working and efficient working possible. The Minister mentioned a figure of 12,000,000 tons and a sum of £362,000. If my arithmetic is not altogether awry, that would represent a royalty of about 9d. per ton. I do not know how that would compare with the sale price of the ore or the mineral produced, but if there was a 12,000,000 ton deposit, I should like the Minister to say whatis the world market price of such mineral and whether the 9d. per ton is a small royalty or a large royalty in comparison with the price. I think the Minister might usefully give us that information. In other circumstances, we might have chaffed the Minister somewhat about the fact that about the time the Book of Estimates was prepared this work was not going to be done, but then, rather coincident with certain events in Wicklow, it came to the forefront again. Having, however, been victorious in that campaign, we can afford to let the Minister off any adverse comment on that line.

The Supplementary Estimate is one that will not be vouched to the Comptroller and Auditor-General. It provides for a grant, I understand, to the company, and it is paid if and when the company requires funds, and the actual detailed expenditure will not be subject to audit. That again brings me to the general question of the necessity for some type of control by this House over these subsidiary bodies and companies that are set up with State funds. They were set up with State funds because it was thought—and there is an argument in favour of it—that day-to-day detailed Civil Service control was undesirable over the work of such companies, but I think there should be some scheme brought forward, and agreed to by the House, by virtue of which you would have something in the nature of or the equivalent of an annual general meeting for these State companies from which rather more information would be obtained than would be available by question in the House and which would be more appropriately obtained at a meeting like that rather than by question. As it is, the only way in which information can be got about this type of company is by the form of question, which quite frankly I do not think is the right way because I accept the principle that the Minister has no responsibility for the day-to-day detailed working of the company. The Minister merely lays down general policy for the company. As matters stand there is no method of eliciting information except by form of questionor on the general Vote. We must appreciate, however, that this is taxpayers' money, that we are here as representatives of the people and that there should be some method by which information can be obtained for the benefit of the community as a whole.

So far as the exact estimate is concerned, I want the Minister to be quite clear and quite specific as to the value of the work that is to be done. I am not asking him to express how many areas or miles of tunnels have been explored, but I want to know is this the final work which it is deemed desirable by the experts to do, to decide whether the minerals are worth working on a commercial basis or not. I am not so much interested in whether or not the work is going to cost £85,000 or £150,000. If this is successful as an exploration basis, then, obviously, one moves on to something permanent. I want to be clear as to what the experts have to say, if they think there is nothing more we can do by exploration or whether there is anything else we can proceed to consider.

Mr. MacBride

One thing I should like the Minister to remember is that this form of exploration is speculative and we have to be prepared in any attempted development, to speculate and to take plenty of risks. This is one scheme in which we have to take risks. I think we should be prepared to withstand many failures and we should appreciate that we have to sink a good deal of money in these ventures.

Mr. Lemass

The difficulty in answering Deputy Sweetman's question as to whether this represents the final stage of the work is that there is still, to some degree, an element of uncertainty and while that element of uncertainty has been considerably reduced by the work to date it cannot be eliminated altogether. When the Act was passed in 1947, I instructed Mianraí Teoranta to prepare a scheme for the exploration of the Avoca deposits. That scheme was submitted and was then estimated to cost, to completion, £250,000. Their scheme was in fact approved by the Government of the day early in 1948. Later there was a reconsideration of the desirability of authorising that expenditure on the project.

There was a period in which the succeeding Government were doubtful whether they should go on with the scheme at all. Ultimately, there was the decision to go ahead upon a limited basis at a total cost which was not to exceed £120,000. It was thought then that that expenditure would give sufficient information to enable a decision upon commercial working to be taken. Mianraí Teoranta then ran into some difficulties. The de-watering of the old workings proved a particularly difficult and expensive operation mainly because of the wastage of plant due to the presence of sulphur in the water.

A further expenditure of £70,000 was therefore approved by my predecessor in March, 1951. When I resumed office as Minister for Industry and Commerce the company came to me and said that to speed up this work, which I was anxious to have done, the tunnelling on which they were proceeding was going rather slowly and should be augmented by a diamond drilling programme and a further expenditure of £99,000 was approved for that purpose. At that time I was given to understand that that expenditure, when completed, would have brought this exploration to the stage at which enough knowledge would be available to start trying to sell the idea of the commercial development of minerals to firms that might be interested. That did not happen.

Mr. Sweetman

Did it not happen because the cost of the work was greater than anticipated or because it was found there was other work to do?

Mr. Lemass

It was partly due to the fact that the diamond drilling revealed that the best prospects lay in another direction. Let me put it this way: the company said they had proven enough to put almost beyond doubt that the balance of the ore required for commercial working was there, but that was not good enough to go to anybody that one was trying to interest in the commercial exploitation of the minerals and they, therefore, proposed to complete this work in the directionof the existing tunnel by a diamond drilling programme and it is on the work in hands on the tunnel and the diamond drilling programme that this expenditure of £100,000 is involved. At that stage the Government, while anxious to get an early completion of the exploration work and approving of the idea of completing it by diamond drilling, recognised it was also desirable to keep the tunnelling operations in progress for the time being, firstly, because the tunnel itself would be an asset to anybody who might be thinking of carrying out mining operations and, secondly, because of the retention of the experienced miners which the company employed. Therefore we said: "O.K., we will give you the £100,000 you say will complete this work, but we want you to modify your programme so as to retain these experienced miners in your service to whatever extent is practicable and we will recognise that your estimate of the cost may no longer be accurate. It may involve an expenditure of more than £100,000, but when you have reached the £100,000 you have got to come back and tell us if it is worth while going on." That is how it stands at the moment.

Mr. Sweetman

Then it is a fact that when this physical volume of work is done, that is all the work that remains to be done for exploration?

Mr. Lemass

Yes, but the Deputy will appreciate that if the diamond drilling at an early stage should show that the ore has petered out, it will stop then. The exploration goes on only so long as the ore continues to be found.

Mr. Sweetman

If this physical volume of work shows a good return there is no other exploration work to be done.

Mr. Lemass

That is the position. On the recovery of cost, the question I put to the officers of the board was this: "This means that ultimately we are going to put £400,000 into the exploration of these minerals; when we have established the existence of 12,000,000 tons of ore of this analysis, is it worth anyone's while to pay us £400,000 cashfor the privilege of working the minerals?" and they said that beyond doubt at the prevailing prices for these minerals it would be worth that outlay to any company anxious to undertake commercial development. It is on that basis that I am justifying to the Dáil the provision of the additional money required. It is also a fact, of course, that the actual expenditure now contemplated is relatively not very much greater than the estimate prepared in 1947 by the board having regard to the changes in values since.

Question put and agreed to.