Dáil Éireann debate -
Wednesday, 12 Feb 1958

Vol. 165 No. 1

Public Business. - State Guarantees Act, 1954 (Amendment of Schedule) Order, 1958—Approval of Order in Draft.

Minister for Industry and Commerce (Mr. S. Lemass)

I move:—

That Dáil Éireann approves the following Order in draft:

State Guarantees Act, 1954 (Amendment of Schedule) Order, 1958,

a copy of which Order in draft has been laid before the House.

The purpose of this draft Order is to guarantee borrowing to the extent of £1,300,000 approximately by St. Patrick's Copper Mines Limited. That is the amount of money which is required now to bring the copper mine at Avoca from its present stage of development to a stage where it will be ready to go into production and also to repay a sum of £350,000 which was borrowed in September last by St. Patrick's Copper Mines Limited, on a short term basis under a guarantee given under the Trade Loans Guarantee Acts.

Deputies are aware in general terms of the history of this mining enterprise in County Wicklow. These copper deposits were investigated over a number of years by Mianraí Teoranta, a State company which was set up by legislation passed in 1947 for that and similar purposes and which received, during the whole period of its exploration work at Avoca, Government grants for that work totalling £543,000.

When the exploration work had proven the existence at Avoca of valuable deposits of ore—valuable in the sense that the quality of the ore had been established and the area of the deposits had been revealed so that commercial working became possible— the mines were leased in 1956 to Canadian interests who established this Irish registered company known as St. Patrick's Copper Mines Limited to undertake the commercial development of the deposits. St. Patrick's Copper Mines Limited is a subsidiary of Irish Copper Mines Incorporated, which is registered in Canada; and Irish Copper Mines Incorporated is, in turn, a subsidiary of another Canadian mining company known as the Mogul Mining Corporation.

Since the lease was given to St. Patrick's Copper Mines Limited in 1956 they have been actively engaged in the development of the deposits, and in the construction of a flotation plant, with the object of commencing production on a commercial scale as soon as practicable. The target date they had in mind in that regard was June or July of this year. As Deputies are aware, they are employing a substantial number of workers in these development activities and that number may be expected to increase when commercial production commences. Up to the present they have spent over £2,000,000 on the project and the progress reports which they have made periodically to the Department of Industry and Commerce indicate that their scheme of development is being executed efficiently and very expeditiously.

However, the company have run into financial difficulties. St. Patrick's Copper Mines, Limited, were dependent for their finances upon their parent company, Irish Copper Mines Incorporated; and Irish Copper Mines Incorporated, as Deputies will understand, were dependent on their parent company, the Mogul Mining Corporation. Credit restrictions in Canada, which became quite acute in the past year, have seriously affected all investment and development projects and the Mogul Mining Corporation informed me that they were encountering difficulties in financing the completion of the development work at Avoca. They said they were being forced to make a selection between the various projects in which they were interested with a view to deciding which of them should go on and which of them in the circumstances should be brought to a standstill.

About another £1,000,000 is needed to bring the Avoca operations to the stage at which commercial working can commence. If that money is not forthcoming, development work will have to cease and the mine will not be brought to the production stage at all. When they reported that position to me last September, I considered that while investigations were being made into the possibility of raising the money by one means or another, the company should be temporarily assisted to maintain its operations. Therefore, I gave a trade loan guarantee for £350,000 which was raised by the company on a short term basis from an Irish bank. If that financial accommodation had not been made available to the company they would have had to cease operations in September last.

Since then the promoters, that is to say, the Canadian interests which are backing the St. Patrick's copper mines, have been very active in their efforts to secure financial accommodation from various sources. After exploring some other possibilities, they succeeded in procuring an offer of a loan of £1.3 million from a Canadian issuing house. The terms and conditions of that loan which would have involved a guarantee by the Government here of payment of interest and repayment of capital— that was a condition under which the loan was offered—were regarded by me as so onerous as to make it a transaction for which it would not be appropriate to give the guarantee of the Irish Government.

During the course of discussions which I had with the representatives of the company in the matter, I became aware that there was an Irish company which was prepared to consider granting them the loan they were seeking on more favourable conditions. Subsequently, the Canadian interest negotiated with that Irish company for a loan of £1,368,420. It is a condition of that loan that it should be guaranteed by the Government both as to interest and principal.

The loan will be secured by a first mortgage on the present and future assets of the St. Patrick's copper mines. It is a substantial liability, reckoned in a financial way, for the Government to undertake and we naturally gave very careful consideration to the question whether we would be justified in guaranteeing a loan of that magnitude. In our appraisal of that situation we had regard to the fact that these copper deposits in Avoca represent a national asset of very considerable value.

When I, as Minister for Industry and Commerce, persuaded the Dáil to enact the legislation and vote the money which started the process of exploration at Avoca, I expressed my view then, based upon the information which was available from our technical advisers, that these deposits would turn out to be a considerable national asset but, in fact, the investigation of them has disclosed that they are even more important than I then assumed. That is, I think, a factor which the Government was entitled to take into account and which the Dáil should have due regard to also.

Very substantial employment is, as the House knows, being provided by the development work now in progress and the value of the production that will eventually take place and which, of course, will be entirely for export in the form of copper concentrates, will be also important from a national viewpoint. The deposits which have been proved, in the technical sense of that term, are sufficient to justify commercial development on a substantial scale for a period of about 12 years.

There is also the fact that we have spent £550,000 on the preliminary work on these deposits and that expenditure will be wasted or at any rate unproductive for the time being unless St. Patrick's Copper Mines Ltd. are able to obtain the additional funds which are now needed to enable them to complete the development work. While I would be most reluctant to contemplate the possibility that it would be necessary for the Government, if it guarantees the loan, to enforce the security, nevertheless, the fact remains that if this security had to be enforced as a result of default in repayment by the St. Patrick's Copper Mines Limited, the Government would acquire, under the agreement, control of an undertaking upon which more than £3,500,000 will have been expended and which will have been then brought to the stage of full development.

Mr. Norton

What is the amount spent to date?

Mr. S. Lemass

£2,000,000.

Mr. Sweetman

Would the Minister prefer that we waited until he finished to ask questions? Does the £2,000,000 include the £550,000?

Mr. S. Lemass

No. When I say £3,500,000, there is £2,000,000 already spent; £1,000,000 to be spent before development is finished plus £550,000 that was——

Mr. Sweetman

Plus £385,000?

Mr. S. Lemass

That is to be repaid.

Mr. Sweetman

£2,000,000 spent, plus £500,000, is £2,500,000, plus £1,385,000 is £3,900,000.

Mr. S. Lemass

I am talking in approximate figures.

Mr. Sweetman

I am quite happy about the matter so long as I know what is included and what is not.

Mr. S. Lemass

That is the general situation. The company have spent approximately £2,000,000 to date of their own resources. Perhaps, there may be some misunderstanding in that regard; £350,000 was the amount they borrowed under the short-term guarantee loan; £2,000,000 has been spent including the £350,000 on development work and £1,000,000——

Mr. Sweetman

The Minister said £3,500 at the beginning.

Mr. S. Lemass

£350,000.

Mr. Sweetman

The Minister said £3,500 but it was a slip of the tongue.

Mr. S. Lemass

By July next the mine will be at the stage where it can commence the production of concentrates. At that stage £3,500,000 will have been spent. If it should happen that the company cannot carry on and have to default on their obligations under the loan arrangements, then we come into control of that mine in consideration of paying off the amount which the company has borrowed and which we are guaranteeing under this arrangement. I should not like to see that situation developing because I think it is far better that the existing arrangements for the commercial working of the mine should be carried through.

In that regard the House must take cognisance of the very substantial fall in the price of copper during the course of the past year. That fall in the price of copper has created difficulties for St. Patrick's Copper Mines Ltd. Presumably it was one of the factors which made it difficult for the company to procure the additional finance which it needed to complete its development operations without recourse to the assistance of a Government guarantee. It is certainly a factor which must be taken into account in deciding whether or not we should guarantee these borrowings by the company.

In March, 1956, when the Dáil was discussing this matter previously copper had reached £436 per ton; since then it has fallen to £164——

Mr. Sweetman

Fluctuating at present between £160 and £170. Would the Minister accept that?

Mr. S. Lemass

That is about right. That collapse in the price of copper is stated to be due to the very considerable increase in production which the rise in the price of copper prior to 1956 had set in train. In this matter, however, we have sought to obtain views from the most authoritative sources open to us. They tell us that while mining development throughout the world is certainly not being planned upon the assumption that copper would remain at or over £400 per ton for long, it is based in the main upon estimates that the price may average around £220 to £240 per ton.

These competent authorities advise us that the fall in the price of copper is sharper than most experts in that field would have attempted to predict and that the present price of copper is considerably lower than the oversupply position would appear to justify. The outlook for copper is regarded as quite hopeful because of the prospective growth in the use of electric power and in industrial output which will involve an increase in the world's demand for electrical equipment and for apparatus made from copper. The size of the known copper reserves of the world is said to be remarkably small and the prospects for mines such as Avoca are reasonably good, in the light of estimates that world consumption of copper will increase by 1,000,000 tons or about 33? per cent. between this year and 1960 or so.

However, before we came to a conclusion upon the question of guaranteeing these borrowings for St. Patrick's Copper Mines we had the benefit of a report on the Avoca mine which was prepared by a well-known investment trust which has a substantial mining interest including copper in various parts of the world. A study of the report shows that the experts, employed by the trust to prepare it, had formed a distinctly favourable impression of the Avoca deposits. It was stated in the report that the development and construction work at the mine was proceeding in a very workmanlike fashion and they described the approach to the mining operation involved there as "imaginative, yet sound". The original estimates for mining and milling costs which were made by the Mogul Mining Corporation when the question of the lease was being negotiated have been confirmed by the report, and the estimates of mineral reserves which were made then have been shown to be very conservative. The mill design was stated by these experts to be sound and the anticipated recoverings and the costs were reasonable and were amply supported by laboratory tests.

The crucial factors which were the concern of the experts who prepared the report were the anticipated forward price of copper and, of course, the possibility of finding sale for the pyrites concentrates which will be obtained from ore at Avoca as byproducts.

A decision regarding the guaranteeing of the loan obviously depends therefore upon some imponderables. A risk has to be taken but it is a closely calculated risk and, of course, unless it is taken there can be no hope that the development of the Avoca Mine will be undertaken in present circumstances. We reached the conclusion, therefore, that we would be fully justified in guaranteeing the loan and we recommend to Dáil Eireann that it should approve of the draft Order under the State Guarantees Act which has been laid before the House. By doing so we will ensure that the development of the mine will be completed, that it will be brought to the stage of production and, as I said, at the worst it means that we would acquire control of this valuable national asset, to be availed of as circumstances allowed; at best we shall have helped the fulfilment of a very useful type of undertaking which will add substantially to our national resources. Therefore, although I had to give a considerable amount of thought and time to the examination of this matter I have no hesitation in expressing my view that the right course is to give that guarantee and I would ask the Dáil to approve the Order.

Mr. Sweetman

The Minister referred to an agreement a couple of times. I take it he is referring to some written agreement made between either himself or the Minister for Finance and St. Patrick's copper mines?

Mr. Lemass

The main agreement, of course, is between St. Patrick's copper mines and the company that is actually lending the money.

Mr. Sweetman

Is there no agreement between the Minister and St. Patrick's copper mines?

Mr. S. Lemass

Our agreement will be as guarantor to the lender.

Mr. Sweetman

Has the Minister not entered into any subsidiary agreement, either himself or the Minister for Finance? I am in some difficulty about this because although the motion is in the name of the Minister for Finance it is the Minister for Industry and Commerce who is moving it and I do not know to which Minister I should refer?

Mr. S. Lemass

As I understand it, the only guarantee we give is to the lender of the money. But then there will be an agreement between ourselves and St. Patrick's copper mines as to the period of repayment, the amounts of the repayments, dates and so forth. Ultimately, the enforcement of the terms will remain with the lender.

Mr. Sweetman

I understand that, but surely there has been an agreement, either in draft or executed, between the Minister and St. Patrick's copper mines?

Mr. S. Lemass

Yes.

Mr. Sweetman

Is it in draft or executed?

Mr. S. Lemass

It is in draft.

Mr. Sweetman

Does the Minister propose to table it?

Mr. S. Lemass

I would like to consider that. I think not. I should say that normally it would be regarded as detrimental to the interests of the company to table it. I should like to consider it.

Mr. Sweetman

Does the Minister not consider that it ought to be tabled before we consider this motion?

Mr. S. Lemass

No. It would be a detailed arrangement, under which the dates of repayment of principal would be stated and the amount of repayment in each case. There is, of course, some necessary modification of the original lease in order to protect the interests of the State, especially in regard to the repayment of the £550,000 that is due by the company, and so forth.

Mr. Norton

Would the Minister say whether any provision will be made in this draft agreement whereby the State's obligation in the form of this guarantee will be met before there will be any profit paid on the original investment?

Mr. S. Lemass

Yes, certainly and, indeed, before profit is paid there is also this obligation to repay——

Mr. Norton

£500,000?

Mr. S. Lemass

That is right.

Mr. Sweetman

Then I take it the position in respect of the agreement is that a draft agreement has been approved by both sides and it will not be executed until this Order is passed by both Houses?

Mr. S. Lemass

That is so.

Mr. Sweetman

But the terms of the draft agreement have been approved?

Mr. S. Lemass

They have been.

General Mulcahy

As between the Government——

Mr. Sweetman

And St. Patrick's, as I understand it.

Mr. S. Lemass

And the lender and the borrower.

Mr. Sweetman

And St. Patrick's copper mines. I must confess that I heard the speech of the Minister for Industry and Commerce with considerable pleasure. In that speech, in a few words, lasting for perhaps half an hour at the most, he tore to ribbons everything that he had said in February, 1956, everything that Deputy Aiken, as he then was, on this side of the House, and other speakers had said. I congratulate the Minister for Industry and Commerce for having provided so completely in his speech to-day the vindication of the measures that were taken by Deputy Norton and me two and a half years ago. The Minister can be assured that on this occasion—and I know that I am speaking for Deputy Norton in this; he will be speaking himself afterwards —he will get from this side of the House far more constructive help in dealing with this mining venture than was given to us and to me when I was handling the Mining Bill when I was on that side of the House and the Minister and the Fianna Fáil Party were over here. Even down to the very last details the Minister has confirmed and has vindicated the views that we then expressed.

I shall give the Minister the references if he wishes. All the references that I shall quote come out of Volume 154. I remember quite well how the Minister and the members of the Fianna Fáil Party made the welkin ring because, in accordance with the normal practice and because of the difficulties of commercial working, the lease was not at that time put on the table of the House. Now the Minister proposes to do exactly the same thing in respect of the draft agreement. I want to say categorically now, as I said then, that the practice is correct in both instances. Perhaps in an effort to hide and to gloss over some of the things the Minister said at an earlier stage, we have not got down really to the bedrock or the roots of the necessity for this motion.

First of all, let me say quite categorically, also, that I think it is right that a project of this size should be dealt with under the State Guarantees Act with this procedure rather than under the Trade Loans (Guarantee) Acts because the Trade Loans (Guarantee) Acts did not visualise anything as comprehensive or as large as this project. But I do think it would be desirable, when the Minister for Industry and Commerce or the Minister for Finance—a Minister, shall we say—was coming to this House that he would have given us more information as to the examination that has taken place on a similar basis to that carried out under the Trade Loans (Guarantee) Acts.

The Minister referred to a report that he had received from an investment trust and that such report confirmed the methods of working and the costings. I find considerable difficulty in relation to that in agreeing the figures. The original figures were that it was to take £1,500,000 for the erection of the concentrator and £750,000 additional to that for other workings and for the purpose of bringing the mine to productive working. The figures the Minister has given in relation to the necessity for this guarantee make it appear that those original estimates have been somewhat exceeded. If the position is that £2,000,000 has been spent up to date and a further £1,000,000 is now required, setting off the £385,000 against the £350,000 trade loan guarantee already obtained, then it would seem that approximately £3,000,000 is required and I think the Minister should give us some indication as to the reason for that change.

When the St. Patrick's copper mines authorities came to the Minister for Industry and Commerce subsequent to the change of Government and requested a loan under the Trade Loans (Guarantee) Acts first of all and requested this loan now, it was open to the Minister of the day to make any changes or terms that he wished. It was open to him to suggest any variation that he wanted to suggest in the terms of the existing lease or the terms of the existing arrangements.

We all know the manner in which the existing arrangements were attacked up and down the country and the manner in which the personal reputations of Deputy Norton and of myself were attacked by Fianna Fáil some two years ago, without any regard for the truth or without any regard for the facts and it is at least satisfactory to us now to know that the Fianna Fáil Minister for Industry and Commerce has come into this House to say, in his own words, that he could have varied those terms but he thought that it was far preferable that the existing arrangements should be carried through. I doubt if there could have been a more complete vindication of the steps that were taken by Deputy Norton and myself and that were attacked so viciously at that time.

It would have been possible for us in February, 1956, to refute in a more categoric way much of the bunkum and nonsense that was talked in this House and outside it by, let me add, Deputy Lemass, as he then was, amongst others but even more so by Deputy Aiken as he then was, but for us to do so would have meant decrying the value of the work that had been done, the value of the work that was likely to be done and the possibilities of profitable operating. We preferred, and were right in preferring, no matter how much we were attacked at that time, to say nothing in our defence that would in any way affect the working of a national asset. We remember particularly how Deputy Lemass, as he then was, made the welkin ring with estimates that St. Patrick's Copper Mines, Limited, the Canadian interests, would be able to extract out of this venture some £13,000,000 profit.

If the Minister has any doubt about his recollection, he would be wise to refer to column 97. We were accused, up and down the country, of giving away a project to Canadian interests that would mean a profit of £13,000,000 for them. Now the facts emerge. The Minister has just said that this is a borderline mine. It has a good volume of a fairly low-grade copper concentrate. It is a borderline mine that can produce satisfactory workings and an adequate volume of copper concentrate but it will not be on the basis suggested by the members of the Fianna Fáil Party at that time in an attempt to delude the country.

They had an opportunity, as the Minister said a few minutes ago, of changing the arrangements, if they wanted to. He then said it was preferable that the existing arrangements be carried on. If there had been any truth in the figures put before Dáil Eireann in February, 1956, by the members of the then Opposition, there would not be any necessity now to come to this House with this motion. If those figures were operative, the money could be obtained anywhere without the slightest difficulty or necessity for a Government guarantee.

We can remember, too, how, at that time, the then Deputy Lemass pinned his faith to the opinion which he voiced in February, 1956—when the price of copper was over £400—that anybody except a fool knew that that price would be maintained and would probably be exceeded. We preferred to take a more realistic view. The course of events in relation to copper prices has shown that our view was correct. Time has proved that the view so cheaply bandied about by the members of the Fianna Fáil Party, in an attempt to decry the work of the inter-Party Government, was entirely without foundation.

This motion is to ensure that the work we did in interesting the Canadian people in this mine can now be carried through to the benefit of the Irish people, both in relation to employment and to the production that will operate in Avoca. We support the view that funds should be invested in something that will give a productive result. Our whole trouble has been one of too little investment in production. This is an opportunity for further productive effort.

We shall not make the case—as I know Fianna Fáil, judging by their 1956 effort, would make the case—that there was a sum of £1,385,000 for the Canadian interests, while, at the same time, the grants for farmers who wanted to rid their herds of bovine tuberculosis were being halved because there was no money for them. We shall not attack this project in the cheap political manner in which it was attacked two years ago. I regard the Minister's speech to-day as a complete vindication of what was done by us and as a withdrawal—albeit, an implied withdrawal, but as much as one can hope to obtain from the Minister for Industry and Commerce—of the very scandalous propaganda which he started two years ago and which he has now found to be entirely without foundation.

Apart from this project in Avoca, does the Minister propose to make similar arrangements available for possible copper mines in other parts of the country? There was a report recently of an investigation by a geologist on the work to date in the Berehaven peninsula. Another company are operating there. Is it proposed that that interest will be fostered in the same way? Is it proposed that the many other exploratory operations in relation to our mineral resources which, 12 months ago, were being carried out in various parts of the country will be assisted by the Government in the same manner as this project?

Whether one likes it or not, the fact remains that, with the exception of Slieveardagh and Avoca—we are aware of the work that was done in both these instances by Mianraí Teoranta—until the inter-Party Government came into office in 1954, nobody was interested in any minerals anywhere else in the country. If there was—and there has been—interest in Irish mineral resources in the years 1955 and 1956, it was because of certain steps that were taken for the purpose of publicising, in the then high mineral price atmosphere, the resources we had. As the present Minister knew very well, there were such high prices for minerals that you could get almost anything considered in the then existing boom. That was the moment to do it, and it was done. It was possible to get that interest only because of the steps we took as a Government to change the tax laws in relation to mining ventures —a task which the present Minister for Industry and Commerce, some 20 years previously, had to tackle but failed completely to carry out. Having learned his lesson—and having, by implication, come to this House to-day with a white sheet around him for all the things he said two years ago—I hope the Minister will learn further lessons and assist the other projects in the rest of the country.

Mr. Norton

I must approach this problem somewhat differently from Deputy Sweetman's approach. He says he got great consolation this afternoon from the Minister's speech. Unfortunately, I got no such consolation. The Minister's speech to-day shows the shallowness and dishonesty of our public life. I do not know whether or not the Minister read the speeches he made here in February, 1956——

Mr. S. Lemass

Has the Deputy?

Mr. Norton

Sorry; I think the Minister always thought he was a Minister. Has the present Minister read the speeches which, as Deputy Lemass, he made here in February, 1956?

Mr. S. Lemass

I asked: "Has the Deputy read the speeches?"

Mr. Norton

I had, unfortunately, to listen to some of them and I never suffered myself to be tortured by such dishonesty and claptrap in my life before or since, thank God. I suggest to the Fianna Fáil Deputies sitting here that a nice little mental recreation for themselves this evening or to-morrow would be to go down to the Library and get a copy of the debate on this matter in February, 1956, to read it carefully and contrast what was said then with the speech of the Minister for Industry and Commerce here this evening. Then they will know how quickly some quicksilver-minded gentlemen can change their outlook.

If there is any such thing as human shame left, the Minister ought to have opened his speech this evening with an apology for what he said in 1956 and what was said also at that time by his colleagues who now, for their then political dishonesty, are rewarded with seats on the Cabinet benches. Even during the last election, members of the Fianna Fáil Party—and, of course, the kept organ of the Party—engaged in all kinds of misrepresentations about the Avoca mines. It was then alleged, in 1956, that this was a spoof, that this was not a sincere business, that if it was sincere, it was dishonest in its whole concept and a kind of political dodge by the inter-Party Government. The present Minister for Industry and Commerce was the spearhead of all that misrepresentation.

Mr. S. Lemass

Would the Deputy quote one single such statement made by me during the election?

Mr. Norton

You had all that rubbish.

Mr. S. Lemass

It was Deputy Norton who said that if there were a change of Government, the mines would close down. He was the only person who brought the mines into the election.

Mr. Norton

I never said any such thing and anyone who alleges that I did is guilty of a deliberate lie.

Mr. S. Lemass

Every newspaper in the country reported his saying it.

Mr. Norton

That is not true, and I hope the Minister will quote it when he is replying. What the Minister should now read is what the present Minister for Finance said during the last election about the Avoca mines, what Deputy Aiken said; and it will all prove very interesting and entertaining, particularly for anyone in search of objective truth.

I can understand the Minister being annoyed about these quotations. Everybody is annoyed when they are reminded about misstatements they have made and false prophecies they have made. The Minister turned out to be a perfect mineralogical quack, so far as the Avoca mines are concerned. All his prophecies have proved to be thoroughly unfounded. The price of copper and every other thing the Minister had a try at, turned out to be just not true. Now he comes into the House this evening and says he is satisfied this is a good venture; he is satisfied, on the technical advice which he has got, that the Government should back this venture to the extent of £1.3 millions. A reputable investment trust which has copper interests in various parts of the world has also furnished a report on this, which has so impressed the Minister that he comes into the House to ask the House to give a guarantee in these terms. I think that is a very good conversion on the part of the Minister. He has realised now in 1958 what he ought to have realised in 1956, if he had not been concerned with making so much political mischief at the time—and making it at a time when in fact the development of the mines might then have been seriously imperilled.

Look at the facts surrounding this matter. This mine was in the hands of Mianraí Teoranta for quite a while. They had been told by the Fianna Fáil Government, previous to 1954, to try to make the mine merchantable, to try to get the mine sold to some commercial interest which would exploit it. All efforts to get anybody to interest themselves in the mine completely failed. Nobody was interested in the mine—not even the trust to which the Minister referred to-day, not even probably some of the advisers on whom the Government relied for advice on this matter within the past 12 months. But we succeeded, by a revision of the mining taxation code, in getting a Canadian group interested in this mine.

Mr. S. Lemass

Which came first— the Canadian group or the revision of the code? Which came first?

Mr. Norton

I will answer that in my own way. I am not giving in to this brash interrogation by the Minister for Industry and Commerce to cover up his own want of knowledge.

Mr. S. Lemass

It is a question of fact. Which came first?

Mr. Norton

I will give a fair and full answer and, what is more, the file in the Minister's own Department will testify to the truth of what I am saying. When we had the discussions with the Canadians, they were long and at times tedious discussions, at which officials of the Department sat in. It was clear to us that nobody would be interested in the development of the mines—except somebody from a mental home, perhaps—unless the mining taxation laws were revised. In the discussions with the Canadians, we said to them that, if they were interested in this matter, we were prepared to revise the mining taxation laws and make a lease to them on the basis of the revised mining taxation laws. The Canadians would never have looked at Avoca, if it had not been for the revision of the mining taxation laws. I am certain of that. The Minister will have the opportunity, between now and the introduction of his Estimate, of checking the files in his own Department and seeing that what I assert here represents the whole truth and that there is no suppression of any portion of it. Therefore, the Avoca development came about as a result of the amendment of the mining taxation laws.

Similarly, because of the amendment of the mining taxation laws, other groups were encouraged to start in other parts of the country. To the extent that they could make a success of those mining efforts, I felt it was all to the good, that it might help to kill the notion that whatever we could do with Irish men and women, we could not mine minerals and could not successfully exploit the minerals. I was, therefore, favourable to almost anything that would rekindle in our people a feeling that we had minerals here which, in then existing circumstances, could be profitably exploited and that our people were not inoculated in some supernatural way against the possibility of being able to produce minerals successfully. Let there be no doubt about it, however—there would have been none of that mineral development if it had not been for the revision of the mining taxation code— for which we were responsible.

I do not want these somersaults by the Minister for Industry and Commerce on this question of Avoca mineral development to colour my view on the Avoca project. I think the Avoca project is as good to-day as it was when it was started. I think the Minister has done right in offering to guarantee this sum of money, because I believe that if we can make a success of Avoca, we will do a lot, first, to develop a source of wealth not previously available to us and, secondly, to rekindle the enthusiasm of our people for the possibility of further mineral development in those areas. In any case, having undertaken and carried through so much development work at Avoca, it would be a great tragedy if at this stage the work were to stop and the mines perhaps become flooded again because of the inability of the present owners to carry on development work at the mines.

I should like to ask a few questions in connection with this guarantee. It is said that approximately £1.3 million is required. Is portion of this for the purpose of providing a concentrator and is any portion of it related to the possibility of the installation of a smelter? I had discussed with the Canadian group the possibilities not merely of extracting the concentrates from the ore, but of smelting the ore here. There is a shortage of smelting capacity in Europe and the Canadians intended to take out the concentrates from the ore and to export the concentrates for smelting in Canada, subject to our right to buy back whatever copper we wanted at an agreed price. I tried to get them to discuss the question of the installation of a smelter. One of the points, which I felt was a strong one, put to me at that time was that it would require a few mines like Avoca, or a mine a few times the size of Avoca, to justify the economic operation of a smelter. The possibility was raised of our taking in some other mines in this country or outside it and of smelting the concentrate here because of the possibility of profitable and valuable employment which, I felt at the time, would be advantageous from a production point of view.

I should like to know now whether any portion of this £1.3 million is to be used to provide a smelter or whether at this stage, the Avoca Company has taken any decision on the question of the installation of a smelter or whether it is to continue exporting the concentrates for smelting elsewhere. I should like also to know how much employment is given in the mines at present and whether the State mortgage on the mines in this instance represents a first mortgage on the mines or whether any other Canadian group have any mortgage other than the original £500,000 which the company is liable to repay to the Government. May I also ask what rate of interest the Avoca Company will pay on the money which the State has now guaranteed?

The question of barytes was discussed during the formation stages of the Avoca Company. It was thought that the disposal of the barytes partly here and partly elsewhere would represent a valuable source of income to the country. Will any portion of this money be devoted to the exploitation of this matter and, if so, what are the estimated prospects of a profitable sale of barytes elsewhere? Is it proposed to develop the processing of barytes for use here?

I want to sound one word of warning in connection with this guarantee. I am strongly in favour of giving it. I think it is the right thing to do. We just have to pin our hopes on the possibility that the people engaged in Avoca will be able profitably to exploit the mineral deposits there. Mind you, it is going to be difficult unless copper prices change. When this was discussed with St. Patrick's mines—the company operating at Avoca—it was believed the company could operate profitably so long as copper prices did not fall below £220 per ton. At that time copper was selling at about £400 per ton and there was therefore a pretty deep cushion between the current price and the price at which it was believed the company could operate profitably.

Prices now are down to about £170 per ton and have been falling for quite a time. There is no sign of a rise in copper prices and copper is one of the commodities which goes up inexplicably and comes down inexplicably speedily. There are a limited number of copper deposits throughout the world. Some of them are in places which can become politically hot from time to time. Therefore, copper deposits situated in a country which enjoys relatively tranquil periods of Government are well worth safeguarding, exploring and exploiting.

It may well be that the Avoca people may not be able to get anything like £220 per ton for the concentrate for conversion into copper. They may be faced with heavy losses. The situation which exists to-day might recur and we might be faced with the prospect of another guarantee. On the other hand copper prices may rise, as the optimists believe they will. The hope of all of us is that they will rise sufficiently so that when this company has copper for sale it will be able to sell it at a price which will keep the mine working in an economically rewarding way.

One of the great blessings at the moment is that the Avoca company has no copper to sell, because if they tried to sell at the moment only catastrophic losses would result. It is accordingly fortunate they have no copper for sale. It is hoped that by the time they can make copper concentrate available the price will have adjusted itself to a much more satisfactory level. I am glad the Government have decided to do this. Certainly it is the only decision that could be taken in the circumstances and I am glad the occasion has arisen to enable Ministers who engage in that advantageous pastime of conscience examination to examine their consciences in this regard.

Mr. Dillon

I am primarily concerned to ask the Minister a few questions. For the good of his soul, it will be no harm if I refer him to the Fianna Fáil Pravda for January 19th, 1956. I think it will do some of his colleagues sitting around spiritual good to hear his words again. They were uttered by the Minister when, as Deputy Lemass, and speaking to the Dalkey Literary, Historical and Debating Society, he said that bringing foreign capital into Irish industry was not the real answer to the country's economic problems if it also meant the uncontrol of the production of that industry. He then continued:—

"The method chosen for the development of the Avoca mineral deposits seems a good example of how to exploit Irish natural resources so as to get the very minimum of national advantage from it."

That was Deputy Lemass, speaking in contemplation of the General Election which was then coming over the mountain. Speaking here later, the Minister consecrates himself to the task of inducing the largest possible investment of foreign capital in the industrial development of this country. In the House to-day, he sponsors a guarantee of £1,250,000 for the company, a short two years after he said that such a move represented a good example of how to exploit Irish natural resources so as to get the very minimum of material advantage from them. I am familiar with the techniques of the Minister and that volte face in his case does not surprise me, but for some of his more unsophisticated junior colleagues——

Mr. Norton

There is none of them left even.

Mr. Dillon

——it might be well for them to study this closely. I see the Deputy from Cork City. It is good for his soul to brace himself for the effort of following the Minister fleet of foot, in anticipation of the fact that at any moment he may be expected to start running just as fast backwards. Let none of them dislocate their knees in the execution of that operation in the future. This is one of the first exercises in the acrobatics they may be called upon to do from time to time and they would do well to prepare themselves for others, if my long acquaintance with the Minister is any guide to his future performance.

I do not intend to quote at length. Sometimes jewels are lost to Deputies because they are not in a position to get the appropriate reference, but I would advise Deputies of the Fianna Fáil Party to turn to Volume 154 of the Official Debates and to dwell on Deputy Lemass's—as he then was— forecast as published at columns 96 and 97. They may be surprised to find it in a debate on the Finance Bill, but a jewel found in an unexpected place has no less lustre. These words were uttered by the then Deputy Lemass to persuade the Fianna Fáil Party, and were echoed by Pravda to persuade the Fianna Fáil supporters of the country that the inter-Party Government was dissipating the national resources. There are Deputies here to say there is no use trying to teach them sense. I do not believe that. I have been at it now for a quarter of a century. When I began, it was positively dangerous. The utterance of common sense used to provoke tumult and one was liable to be waylaid in the lobbies——

An Leas-Cheann Comhairle

The Deputy seems to be travelling away from the Order before the House.

Mr. Dillon

——but after 16 years of it, the work bore fruit, and it will bear fruit again. It is in that conviction that I have taken the trouble to offer a nice selection of these quotations so as to remind the Fianna Fáil Party who hear the Minister and the Fianna Fáil patrons of Pravda who read what he says, that they ought to be on their guard. I would urge the Minister himself to remember that the standards of public life are things for which both he and we stand trustee and that it is not expedient, never mind the morality of it, to reverse engines, and so cynically as he is prone to do. I say “cynically” because I apprehend that I shall have occasion to revert to that theme.

Mr. MacEntee

I am afraid the moralising of Deputy Dillon is so dull and dreary that I must leave the House.

Mr. Norton

Play with your white elephant.

Mr. Dillon

His withdrawal will contribute materially to the standard of this debate.

Mr. S. Lemass

How I envy him!

Mr. Dillon

I do not blame the Minister, but what I have had to say to him was not designed to entertain him. It was designed to reform him and he is not of a temperament who would enjoy reformation. Still, the season of Lent is approaching and it will help him to get through. I want to ask him a few questions which I hope he will be kind enough to answer. When I was Minister for Agriculture, I was authorised by the Government to inaugurate what was then known as the Connemara development scheme. My colleagues kindly authorised me to initiate a number of projects in the strictly limited area of Connemara which really belonged to several different Departments. At that time, I was greatly beholden—and I am glad to say so in public—to Mr. Chester Beatty, the distinguished international authority on mineral deposits. I asked his assistance to get a survey of the mineral resources of Connemara and he was good enough to call in mining engineers who made a peripatetic survey of Connemara.

Mr. S. Lemass

We are not discussing mineral development.

Mr. Dillon

I think we are, because Deputy Sweetman inquired was it intended to make similar provision for other deposits. At this time, I was advised that molybdenum occurred in a certain remote area——

Mr. S. Lemass

There will be a Supplementary Estimate next week on which this matter will be relevant.

Mr. Dillon

I know. It is very relevant here if the Minister will wait. I was advised it was in such limited quantity and so distributed as to make its exploitation uneconomic.

Mr. S. Lemass

The exploration of the molybdenum of Connemara started before the Deputy ever became Minister for Agriculture and, what is more, the investigation was completed before he became Minister for Agriculture.

Mr. Dillon

The Minister is clear and certain on that? Will he stake his reputation on that statement, because I would like to refer him to his subsequent statement after I left office that he was now about to conduct a survey of the molybdenum deposits, and Deputy Bartley made an eloquent speech that the dynamic personality of Seán Lemass was now abroad in Connemara and that the molybdenum deposits near Roundstone were about to be uncovered.

Mr. Bartley

Does the Deputy know the name of the place?

Mr. Dillon

Yes—Roundstone.

Mr. Bartley

Oh!

Mr. Dillon

Do not be going on with your codology. The Deputy was bad enough when he was living in Connemara, but, since he came out of it, he is unbearable altogether. There was a whole hullabaloo started. There was a world going to be done in Connemara. Am I right in my conviction that there were no molybdenum deposits capable of exploitation?

Mr. S. Lemass

It would be quite irrelevant for me to answer that question on this motion, and I like to be relevant.

Mr. Dillon

I want to know that. That was just one of the fraudulent pieces of nonsense which the Minister for Industry and Commerce started as a stunt. The danger is that these kinds of stunts bring into serious discredit legitimate mineral prospecting operations such as it is now proposed to pursue.

I want to ask further, has anything been done or is it proposed to do anything to investigate or promote the exploitation of the deposits in Maam. I was informed there was a high probability that they were exploitable and I would be glad if the Minister would say whether he is having any inquiry made into these deposits.

As Deputy Sweetman said, this is the kind of investment which, if it produces results, will increase our exports and enlarge our other resources. That is a reason for taking the risk and going ahead at a time when world prices are substantially below the minimum at which these prices happen to be economically worth while.

I want to ask the Minister another question which I think is of greater urgency. I remember, in the general context of these inquiries, being told by our own geological survey, and it was confirmed afterwards by an international authority, that prior to the opening of the Rhodesian copper mines the Allihies were recognised as the richest copper deposits in Europe and it was only the catastrophic fall in the world price consequent on the discovery of the Rhodesian copper that made them uneconomic to work as late as the twenties of this century.

I believe the Allihies to be a richer source of copper than Avoca. If we are going ahead so energetically in Avoca, is there anybody to give us an indication of what resources we are in a position to deploy for the exploitation of the Allihies. If the Avoca deposits can be effectively exploited it is probably true to say that the Allihies deposits would be 50 per cent. more exploitable than the best we can hope for from Avoca, so far as copper is concerned. I understand there is a pyrites aspect of this question and possibly they may be more favourable in Avoca than in the Allihies. I do not know if copper is the only criterion. I would be glad to hear from the Tánaiste what plan he has in mind for development in the Allihies.

The last question is this: I do not know if his attention has been drawn recently to the fact that in certain copper and tin mines in Cornwall some extremely rare mineral has been found in commercial quantities. I do not know if any survey has ever proceeded in the Allihies area to determine whether that mineral occurs in that area, or whether it has ever been looked for. Having regard to the geographical situation of Cornwall and the Allihies deposits, it does seem that it is not outside the bounds of possibility that this mineral, which has never been discovered in this hemisphere before, could occur in the Allihies area as it has in Cornwall. I should be glad if the Minister would examine the position in regard to that development.

Mr. Russell

I should like to say that I am wholly in support of this guarantee both for the reasons advanced by the Minister and those given by Deputies Sweetman and Norton. In addition, I think it also should have the support of the House because I think it is not incorrect to say that in Avoca lies the future of mining in this country. If anything happens to jeopardise it or cause it to close down, there would be serious repercussions. The revival which started ten years ago—incidentally, by private enterprise and not by Government assistance which came later—might be put in jeopardy for some time.

On the question of expert mining personnel it is something which is extremely difficult to acquire. Due to the fact that we had no mining for 70 to 80 years, up to quite recently, we were faced with the necessity of acquiring personnel from outside the country. The building up of an expert mining team takes quite a number of years and if that team is dissipated by the closing down of the mine it might be difficult to get a similar team together again. I am not quite clear from the Minister's introductory speech as to what company this guarantee is to be given, whether it is the St. Patrick's Copper Mines, which is the Irish subsidiary firm, the Irish Copper Mines which are the Canadian owners, or again, with the Mogul Mining Corporation which is the complete owner.

I think it is correct to say that this enterprise has been completely financed by outside capital. That being so it is more than ever necessary that the interests of Irish nationals should be safeguarded in any agreement arrived at. The mining industry all over the world is going through a very difficult time and if Deputies care to read a report they will see that in countries like the U.S.A., mines are closing down and individual mine owners are looking to the Government for assistance. The same thing is happening in Germany and South Africa.

I do not know a great deal about the mining potentialities of this country. I understand that there are two or three very encouraging prospects of which one is the Avoca Copper Mines. I understand there are other smaller mines in the country but, in general, the pattern seems to indicate certain encouraging aspects but that generally the grade of ore is low and requires a considerable amount of capital to bring it to the production stage and a considerable amount of capital to make it economically favourable.

The Minister mentioned that it would require £1,000,000 more to bring the mine to the producing stage. That may not be the same thing as bringing it to a profit-earning stage. If the present level of prices continues for the next 12 months or two years, I think the Minister, or the Government, may take the view that the mine will not be making a profit for some years. In that event, what happens under this State Guarantees Act? If the company is unable to repay its loans within a few years, due to the fact that it cannot make reasonable profits, does the Minister step in and the Government take over the mine? There is another factor, too, that it will be the end of this year before this mine is producing.

The time is opportune to review the taxation concessions introduced by the previous Government, and referred to by Deputy Norton and Deputy Sweetman. It may be necessary to have more than the eight years' period of concession granted, four years of 100 per cent. free taxation, and four years of 50 per cent. free taxation. That may be necessary, due to the low level in the price of base metals, and it may take longer now for the Irish copper mines to pay their way, even taking advantage of these concessions.

With regard to the matter of a smelter, referred to by Deputy Norton, I do not think in present circumstances we could hope to produce enough concentrates to keep an economic smelter going. I do hope, however, that if prices recover, we will be able to keep several economic smelters going throughout the country. I did not catch the Minister's remarks with regard to the repayment terms and perhaps the Minister would indicate in his reply the term for which this loan is outstanding.

There is another point in favour of the export of ore, whether in concentrated form or in crude form, that is, that these concentrates of copper are exported into a hard currency area. That is a factor to be taken into consideration and is one which is of benefit to the State. Even though the sum indicated under the State Guarantees Act is a substantial one, I think the Minister is right in saying it is a calculated risk which we should take. Taking the long-term view the House should give this proposition its full support and, from my own meagre knowledge of mining, I welcome it, and I wish every success to the mines concerned.

Mr. S. Lemass

I do not hope to give Deputy Dillon sense, but I do hope, by process of constant repetition, to give him an understanding of what is taking place in his immediate vicinity. The fact is that consequent on this motion £1,300,000 of Irish capital is going on a loan basis into the Avoca mines. Deputy Dillon's leader has been talking about the need for a new outlook and Deputy Norton has been talking about the need for new thinking. From where I sit here, the new outlook and the new thinking are precisely the same as the old. I love a political dogfight. I would love to deal with this matter we are now discussing on the basis on which Deputy Sweetman and Deputy Norton dealt with it. That type of debate appeals to my baser instincts. I feel handicapped by the fact that, as Minister for Industry and Commerce, I am the custodian of national interests, and I cannot use these as a club with which to beat the Opposition. I hate being handicapped in that way as I might injure the club in the process of beating sense and reason into the Deputies.

It is, of course, preposterous to suggest that this Avoca mine started some day in 1955 or 1956 when some Canadians walked into Deputy Norton's office.

Mr. Norton

I tried to tell the truth roughly.

Mr. S. Lemass

I will smooth out the process for the Deputy. A State company, financed by public funds, was charged with the responsibility of investigating the resources of Avoca. That company was set up before the war. Do the Deputies opposite not remember that? Unfortunately, when the war came, the development work could not be proceeded with, and that particular company worked the mines in Avoca for the purposes of producing pyrites to keep our superphosphate industry going during the war.

In 1947 there was a new Act which set up Mianraí Teoranta and provided £85,000 per year for seven years for the express purpose of exploring the mineral deposits in Avoca. The process started in 1947, but it stopped in 1948. Who stopped it? The Government of which Deputy Dillon and Deputy Norton were members. They decided it was not worth while going on with the investigation of Avoca. They were not warm in their seats before their colleague, Deputy McGilligan, came into the Dáil and said that, as an economy, they were going to shut down the works in Avoca.

Mr. Sweetman

Does the Minister remember the mess he made of the legal title?

Mr. S. Lemass

That was a phoney excuse offered later by the Coalition Government for their decision. Perhaps some of them did not even know the decision had been taken before Deputy McGilligan announced it here. When they did know about it, they did nothing but sit down to reverse it. The mines were shut down for 18 months and this development work ceased, but, when pressure of public opinion had built up, they allowed development work to resume again on a very limited scale. It was kept going on a very limited scale indeed, until that Government left office in 1951. Then the delayed work went ahead, and went ahead so rapidly, that the money I got the Dáil to vote in 1947 ran out and we had to get supplementary funds voted by Dáil Éireann to get the work completed.

The work was completed before I left office in 1954. That company reported to me that mineral deposits were in Avoca of such character and extent that commercial operations could be contemplated. I had discussions with them as to whether commercial operations should be attempted in the form of leasing the mines to a private company to do it, or whether it should be attempted in the form of an extension of the activities of Mianraí Teoranta. Deputy Sweetman referred to the debate we had here in 1956. The chief issue in that debate was whether it was preferable to lease these mines to Canadian interests that had sought them, or to develop them as a State enterprise through Mianraí Teoranta. I am no socialist and Deputy Norton sometimes poses as one; yet at that time I was considering the possibility of State enterprise and Deputy Norton was the defender of private enterprise.

Mr. Norton

You told them to close down in 1954.

Mr. S. Lemass

They were told nothing of the sort. They were told to put forward any proposals they had for the commercial working of the deposits and to give me the benefit of their views as to whether they could develop the resources themselves.

Mr. Sweetman

Would the Minister let me have one quotation?

An Ceann Comhairle

Deputy Sweetman has already spoken.

Mr. S. Lemass

Let me give the true history. Because of their efforts, we are told, they interested these Canadian people in the mineral deposits of Avoca. When interested Canadians came to Ireland, Deputy Norton, as Minister for Industry and Commerce, at first refused to see them.

Mr. Norton

On a point of order, the statement made by the Minister is a falsehood, and if he refers to the official minutes, he will see that what he stated now is not in accordance with the truth. Not only did I see them, but I saw them on a considerable number of occasions, and I have letters from them testifying to this. I would call attention to the fact, Sir, that it was agreed to adjourn at six o'clock and take other business.

Mr. S. Lemass

There I am, stymied again. Be here when I resume.

Debate adjourned.