Dáil Éireann debate -
Wednesday, 3 May 1967

Vol. 228 No. 5

Smelting Bill, 1966: Second Stage.

Minister for Industry and Commerce (Mr. Colley)

I move that the Bill be now read a Second Time.

The purpose of the Bill is to prohibit the smelting of ore concentrates except under licence. Although the smelting of lead and zinc is the specific matter in mind, the Bill will, for convenience, control the smelting of all metals. The Dáil is aware that lead and zinc are being mined on a substantial scale in the country and that this mining is expanding. The processes carried out at such mines include the reduction of the ores into ore concentrates, which are exported. I understand that the exports from the mine at present in operation are contracted for, for some time to come.

The extraction of the metals themselves from the concentrates would require the establishment of a smelter. This is an undertaking that would involve a very high capital investment by the promoters, and the economics of such a project would require a great deal of study. Smelters usually have a longer life than the mines which initially provide the ores and have to be supplied in their later years by ores from other sources. In our case, this could mean at some future date, the importation of ores.

It is also the case that the processing of metals from ore concentrates may give rise to by-products. The economic use of these by the development of associated industries of a chemical character may have a considerable bearing on the economic prospects of the smelter.

A group of companies, at present involved in the mining of lead and zinc in this country, propose to undertake, with the aid of consultants, a feasibility study of the prospects of establishing a smelter here. This study will be costly to them and may take a considerable time to complete. One of the objects of the study will be to see whether the necessary financial backing will be available for the establishment of a smelter in this country. Such backing will not be attracted unless the promoters are in a position to show that, if they satisfy my requirements, they will be the sole licensees. The Bill proposes, therefore, to make it mandatory to obtain a licence from the Minister for Industry and Commerce to undertake the smelting of metals from ores.

It is unlikely that the country could support the installation of more than one smelter, if indeed one proves feasible. It is my intention, if this legislation is enacted, to give a conditional licence to the group that I have mentioned and to no one else. This will enable them to carry out the vital preliminary study. If the study should indicate that the erection and operation of a smelter here is technically and economically sound and if, for any reason, the group concerned are not prepared to undertake such a project, I will not be prevented from considering alternative propositions.

It is not my intention to compel mine operators, other than those responsible for establishing a smelter here, to send their concentrates to this smelter.

I would like to repeat that the actual erection of a smelter is not an immediate issue. The examination of its possibilities must come first, and as I have said, this examination may take a considerable time—perhaps the best part of two years—to complete and assess.

Controlling legislation is a prerequisite for getting a full examination launched and I commend this Bill for the favourable consideration of the Dáil.

Mr. Sweetman

This is an enabling Bill and to that extent, if it were not for one paragraph in the Minister's speech to which I shall refer, my comments on it would be very short. Indeed it is an enabling Bill to assist in the smelting of such concentrates of mineral ores as may be found in Ireland. Everyone wants to see a smelter here; the Minister for Industry and Commerce and I and indeed every person in the country want to be certain that if it is at all possible the labour, the additional work, the by-products involved in a smelter are brought to Ireland. But I am distinctly worried that the effect of this Bill will be not to bring a smelter to Ireland but effectively to prevent smelting in Ireland, if one paragraph of the Minister's speech is to be taken at its face value, and which is in direct contradiction of what I understood was the position before.

We must, first of all, look at this in the general background of mineral development in Ireland, mineral development which has, thank goodness, reached a fairly interesting stage at the present time. Of the four discoveries there have been in Ireland, the first in operation is the lead and zinc deposit in Tynagh, where Irish Base Metals Ltd., a wholly-owned subsidiary of Northgate, has a mill with a rated capacity of 2,000 tons a day. It is the first of the recent discoveries in actual operation. The project at Silvermines, County Tipperary, with which I am associated, as the House knows, will be in production at the beginning of 1968 and will have a mill with a rated capacity of 3,000 tons per day; in other words, 50 per cent more than the Tynagh. There is the Gortdrum project, in respect of which rumour has it that the financial arrangements will be announced shortly—during the course of this year—and then one understands there has been some discovery in Long-ford by another outside company.

In those circumstances, it seems to me—when these are the existing mines here—the proper method of dealing with the implementation of this Bill is not what the Minister has indicated in paragraph 8, but by the Minister saying to those people, who have already ensured that there is this mineral availability, that they should get together in a consortium, and that it would be to a consortium governing them that he would consider the issue of his licence. The issue of a licence in this case to one group alone will, I fear, have the effect of preventing the mineral exploration in Ireland which I thought the Minister for Finance had ensured would continue at a vastly accelerated pace by the incentives created in the Budget.

We must remember this: there is at present an excess of smelting capacity in Europe, and I think probably in the world, but certainly in Europe. The effect of that excess smelting capacity is that those who own smelters are prepared to put up the finance to bring mines into production, provided they have material contracts for the delivery of the products of those mines to them for the purpose of paying off the moneys concerned. That is the way the Tynagh operation in Galway has been financed; that is the way the Silvermines operation in Tipperary has been financed; and rumour has it that that is the way the Gortdrum operation will be financed. So that there may be no misunderstanding: Gortdrum is a copper mine; Tynagh and Silvermines are lead and zinc, with certain other associated minerals thrown in, but primarily the Gortdrum operation is solely copper, just as the others are primarily lead and zinc.

I do not know what type of smelter the Minister has in mind—whether he has in mind the type of smelter in respect of which there is a patent, I understand, now in operation which can only be operated under licence which can, in certain circumstances, take into account copper as well as lead and zinc. That is a matter which certainly should be considered but what I am worried about is this: if the Minister is going to give a sole smelting licence to one group, the effect of that will be that other mining companies— who would be interested in providing a smelter if they were able to find mining potentialities in Ireland—will now be deterred from coming in because they will not be able to participate in such a smelter. It seems to me that that is inherent in the speech by the Minister.

We all know where this idea was born, and the first place and time at which publicity was given to it by the then Taoiseach, but I am afraid what happened was that the people who were concerned in giving this concession were not quite as technically aware of the technicalities as they might be. It would be utterly unreasonable for me to expect the Department of Industry and Commerce, the Geological Survey appendage—and I do not mean appendage in any critical sense— to understand, to know and appreciate all the details in connection with this. I could not possibly do it and nobody in this House could possibly do it. I think the Minister for Industry and Commerce, before he brought this Bill to the House, should have gone to some international firm, got an objective report from them and lay it before the House to enable the House to judge.

I want the Minister to state categorically whether I misunderstood him when he says:

It is my intention, if this legislation is enacted, to give a conditional licence to the group...

My understanding was clear and categorical that the Minister had indicated he was not committed to any group; he has now apparently committed himself, if the words mean what I think they mean. Of course, if they do not, I shall be delighted to hear it.

This is not the same sort of situation as arose at the time, for example, of the establishment of Westport Cottons or Cement. There you had a single licence given under the Control of Manufactures Acts in a condition of permanent—as far as could be seen at that time—protection outside. This is a different situation; it is a situation in which the Minister is giving to one person engaged in an industry, in competition with others already in that industry, a licence, and giving it without a guarantee that the smelting company concerned will provide the finance for future mineral development from exploration stage to bringing the mine into operation, which existing smelting conditions provide. That is a very serious step. It is a step that may well prevent further explorations in the future being brought to production. It is a step which I believe is going to have the result of ensuring that certain people who would otherwise be interested in prospecting and exploration here will not now be interested.

I agree at once that anybody going into a feasibility study must know where he stands, but I think it is an essential prerequisite in relation to this that any existing mine or anyone exploring for minerals in Ireland should be entitled, before the Minister grants his licence, to come together and to ensure that the licence that will be given will be given to a general consortium of people engaged here rather than to one group.

I do not want to say anything in relation to the group concerned. I know they have been very successful in relation to the development of their mine and in relation to the finding of minerals in Ireland. Not merely good luck to them, but thanks to them for the national development that has brought with it. But I do not know whether the Minister has considered this from the point of view of what the reserves of this particular group are —I am not talking about their monetary reserves but their mineral reserves —and whether the reserves they can command for the smelter are sufficient to warrant giving them the exclusive rights.

We all know in relation to mineral development that the normal procedure is that, the first indications of prospecting having been successful, one then moves on to exploratory drilling. Exploratory drilling only goes sufficiently far to prove there is an ore body, and as far as necessary for the proof to show there is a sufficient ore body to meet the cost of bringing the mine into production, and no further. For any company or any person engaged in exploration of that sort to go further than proving the initial amount necessary to bring the mine into production would mean they would be expending funds far in advance of the date on which there would be any return and thereby incurring unnecessary substantial interest charges.

Of course, in relation to open-cast mining, the amount necessary to bring the mine into production is very substantially less than in the case of underground mining. The initial public figures given in relation to the open-cast operation in Galway indicate that about six million dollars were necessary to bring it into production and to provide the initial working capital. We are all glad to see that has in fact now started, with very great improvement to our national balance of payments, and that part of the bonds provided has already been paid off. In the underground condition in Tipperary the amount required is some 21 million dollars. I think everybody would agree that more or less is the ratio one would expect between overground and underground.

But no one really knows for certain what the mineral reserves are in each of those places, and the availability of mineral reserves is a fundamental part of the feasibility of a smelter. It seems to me nonsense to suggest that a genuine feasibility study can be undertaken without knowing approximately, not what the mineral reserves are, but that there are available mineral reserves of the order necessary to provide the raw materials for a smelter in Ireland.

I am not as pessimistic as the Minister when he says there will not be enough minerals in Ireland for a smelter here. I believe there will be in the long term, but I want to ensure that they will be found. I am genuinely concerned that this method the Minister is adopting, rather than assisting, is going to prevent the exploration of our natural resources, which is the first part of the development that is essential. I think the Minister will agree with me that if the establishment of a smelter meant the halting or the slowing of the development of our natural resources, we would be paying too high a price for it. I do not think he or I will differ on that.

Even at this stage I would suggest to the Minister that what he should do is get together a consortium of those who are concerned already with mineral bodies in Ireland so that they can see what the reserves are likely to be in future years. We must consider a long-term future because a smelter would certainly have a life of 20 years. I do not think the Minister would suggest it would be consistent with normal operating practice for a smelter to be provided except on a 20 year life. In the 20 years ahead, we would see whether we are likely to have, and where we are likely to have, the reserves that would meet it and who is going to be providing those reserves. That seems to me to be a cardinal requirement. Certainly, this suggestion, as I understood the Minister to say, of bringing in a Bill in which he is committed in advance to a particular group is not likely to engender confidence in the further exploration and development of our resources.

Mr. Donegan

The particular knowledge Deputy Sweetman brings to this matter has placed the House in the privileged position of having a complete clarification of mining in this country. This has been of value because it has clearly placed the arguments before the House so that both the House and the country can consider in a proper manner the proposals before us in this Bill, and consider them in the light of the knowledge that was not afforded to us in the Minister's opening speech. The fact that Deputy Sweetman was closely associated with this industry is certainly of help to us. I do not profess to know anything about mining. Therefore I am compelled to look at this Bill as a parliamentarian and in the light of whatever experience I have in industry. It does seem extraordinary to me, and does indicate a very great price, that the Minister, having dealt with his proposals for the establishment of a smelter here, says in paragraph 8:

It is my intention, if this legislation is enacted, to give a conditional licence to the group that I have mentioned and to no one else.

In paragraph 6 the Minister defines what is going to happen:

A group of companies, at present involved in the mining of lead and zinc in this country, propose to undertake, with the aid of consultants, a feasibility study of the prospects of establishing a smelter here. This study will be costly to them and may take a considerable time to complete.

We are then left in the position that the Minister has undertaken at this stage, with his powers as a member of the Cabinet and before introducing the Bill here, to give to one group alone the right to smelt, and that the permissive legislation put forward which would allow him to give other licences will not be implemented in that way. This gives the lie to the statements made in the Minister's speech. I am not trying to suggest there is anything malevolent or underhand in the Minister's intentions——

Mr. Sweetman

Nor was I.

Mr. Donegan

Nor was Deputy Sweetman. I am sure the Minister accepts that.

Mr. Colley

I appreciate that.

Mr. Donegan

There is no reproach from this side on that aspect. At the same time, there is the question of the wisdom of his intentions, whether or not this sweeping decision, before even the study is commenced, to give this licence to one group and one group only, is the correct procedure. There are two results which could come from this. One is that the Minister's speech accompanied by a copy of this Bill when it is enacted could be a charter for the collection of money and the floating of a company, in the knowledge that this would be a monopoly. As Deputy Sweetman pointed out, this might not be the best thing for the country. There is also a point that because nobody else will have the opportunity of being involved in a smelter here, that is, taking into account the feeling that there is probably only room for one, further exploratory work and further developments in mining will be inhibited.

The Minister, I am sure, has had considerable advice from his Department and wherever else he could get it before he made his extraordinarily sweeping decision. However, it has been suggested by Deputy Sweetman that the right procedure might have been that we ourselves, before we sold something, which seems to be our position, should have undertaken, with the aid of these consultants, our own investigation into the feasibility of the project. This might have been the right idea, because surely nothing will happen nor will capital be forthcoming until this study has been completed. It does appear as if the greater wisdom would have been for us to do the study notwithstanding its expense—and it is indicated to be expensive. But that was not the Minister's decision.

The House has been, as I say, privileged to get such an analytical study as was provided in a few short minutes by Deputy Sweetman. The House must now seriously consider whether the sweeping decision of the Minister—again with no reflection upon him personally in this regard—as indicated in his speech rather than in the Bill, is the wise one for this country.

Mr. O.J. Flanagan

Very briefly I should like to avail of this opportunity of placing on record our deep appreciation of Deputy Sweetman's keen and very progressive interest in the sphere of mineral development. The development that has taken place at Tynagh and elsewhere has been most successful, and it is a great benefit to this House, to the Minister and his Department and indeed to the whole country that we have what we can describe as an expert on mineral development as a Member of this House.

Might I direct the attention of the Minister to the belief that is generally held that there are vast untapped resources of lead, zinc and copper in various parts of the country? I trust that the group interested in the establishment of this smelter and the section of the Minister's Department dealing with the development of our mineral resources will carry out, if they have not already done so, a thorough and detailed examination of the amounts of copper, zinc and lead which are generally believed to be in the country.

Could the Minister give any idea of the location which the group he has in mind have for the setting up of this smelter, and would he suggest to this group, whoever they may be, that one particular area that could cater for the installation of this proposed smelter is a very substantial site owned by the Government themselves? It is an eight acre site on the old disused military barracks at Crinkle, Offaly, which is 26 miles from the Tynagh mines, 26 miles from Silvermines, and very convenient to a substantial supply of water from the Brosna.

When this Bill was first circulated, my attention was directed to all this by the members of the urban district council and by a number of people keenly interested in mineral development, who have watched the development at both Silvermines and Tynagh. I would ask the Minister to direct the attention of this group to the area I have mentioned. When the Minister grants a smelting licence, I am sure he has some say as to location and, from that point of view, I would ask him to bear in mind this suggestion, which arises because of the development taking place at Silvermines, Tynagh and Rathdowney in Laois. I recommend this plea to the Minister and perhaps Deputy Sweetman will also bear it in mind.

The development of our mineral resources provides a great deal of employment. It also assists our economy. I should like to take this opportunity of paying a special tribute to the very progressive Canadians who have come in here to help in the development of our mineral resources. They have spared no money in a number of areas. Let us hope that trend will continue and that other external interests will be attracted here. Valuable employment will be bound to follow.

Mr. Dowling

I welcome this Bill because of the increased employment and the assistance it will give in helping to redress our balance of payments. Those carrying out these developments deserve our gratitude. I know Deputy Sweetman's interest. He and all the others engaged in this development deserve our support and assistance.

The installation of a smelter opens up great prospects. Section 8 of the Bill indicates that the country is unlikely to support more than one installation of this type. It is important to ensure the best possible service. Deputy Sweetman and Deputy Donegan warned that a monopoly might have the effect of keeping other interested groups out. It could, of course, also be an incentive to others to come in when they realise the service is available. There is the possibility, too, of the importation of raw material for refining here. That would help the development of our industrial arm, to say nothing of giving valuable employment.

Reference was made to by-products. By-products are something to which we possibly do not give enough attention. These can be used in many ways. If this installation takes place, the utilisation of by-products to a much greater degree than heretofore will become possible. That will mean increased employment. The Minister will, of course, ensure that every assistance is given to this very desirable project.

Mr. S. Dunne

This is a welcome measure and a very obvious first step. When anyone proposes to develop the resources of our country, it is our duty as a Parliament to extend every possible facility we can and ensure at the same time that the public weal is safeguarded by the responsible Minister. That will be done in this instance under the terms of this Bill.

The Bill proposes to make provision to enable an examination to be carried out for the purpose of establishing this smelting industry. It will apparently require large capitalisation and considerable examination before that. Naturally every Member of the House will be anxious to see that this is done and to put no obstacle whatever in the way of those who want to do it. Listening to the discussion, it occurred to me that in this particular it is to be hoped that the prophecies upon which many of us were, as one might say, reared that this country contained all kinds and sorts of minerals which were capable of exploitation and which, if properly handled and developed by a native Irish Government would solve all our economic problems will come true. Many will remember this as being the dream of those who went before us. To some extent we are trying to bring that situation about by taking these steps.

There is not really much that can be said about this. It is a very simple measure and it is inconceivable that anybody would try in any way to delay it. On behalf of the Labour Party, I want to say that we sincerely hope the investigation will show that the establishment of a smelter here is a feasible proposition and one which will result in the encouragement of further mineral discovery and development, that in fact it will have a long life and that contrary to a suggestion in the Minister's speech, it may not become necessary, as we sincerely hope to import ores at any time in the future. This, of course, is a problematical thing and cannot be foretold but certainly we welcome this Bill.

Parliamentary Secretary to the Taoiseach (Mr. Carty)

As a Member of this House representing a constituency where there has been considerable development at Tynagh near my own town, I, too, join with the other Deputies in welcoming this Bill.

May I say, here and now, that the advent of the Canadian mining interests to my part of the country in which Irishmen had an interest is a very welcome development and one which has had considerable effect on the economy in East Galway generally?

We had often been told in the past that there were mines at Tynagh. There was one old man in particular who always said that he heard from his ancestors that there had been mines in Tynagh but that these mines during British times had been allowed to lapse. Perhaps it was not entirely the fault of the British because mining techniques in those days were not as advanced as they are now. Those people came to Tynagh and many people were very sceptical about what they might find there. To the surprise and indeed to the enrichment of many locals who took a plunge, they found minerals in considerable quantities.

At present in Irish Base Metals Ltd., we have upwards of 300 men employed in various categories, drillers, bulldozer drivers—it is an open-cast mine so far. The influence on the economy has indeed been considerable. The National Building Agency had to provide a large number of houses in Loughrea town for the executives and then a second scheme of 58 houses, I think, was embarked upon to provide housing accommodation urgently for the operatives. The increase in the population of the town as a consequence of the arrival of so many new families has had a considerable influence on life generally in my town. Many people feared in the beginning that it might have an adverse effect. In fact, it has had an extraordinarily good effect. The mixture of so many nationalities has injected a new spirit into my town, where most of these people live, and has brought a new prosperity to the area. Developments have taken place that we would never have dreamed of some years ago and we have good reason to welcome those people to our area to which they have given a fair measure of prosperity.

The county council, as a result of these new jobs being made available, have had to advertise to find out what the housing demand is in the village of Tynagh itself. I have been told that upwards of 40 families there have now applied to the local authority for a housing scheme in and about Tynagh, so that apart from the development in Loughrea there now seems to be a new future guaranteed for the little village of Tynagh. If the demand warrants the building of a community centre by the county council there, it will also have a very good effect on Tynagh.

The concentrates from Tynagh have to be brought to the port of Galway and from Galway they are shipped. I understand, to Germany and to other parts of Europe where they are smelted. That is a great loss to the economy as a whole because if we have here in our own country, wherever it would be decided to have it, a smelting plant, that would also increase employment here instead of providing employment and raw materials for the workers of other countries.

Of course, the purpose of this Bill is to see if it would be feasible to have a smelter in this country. The amount of capital involved in the establishment of a smelter is fairly considerable and we must ask ourselves whether it is feasible to provide a smelter here. Is there a guarantee that the type of mineral to be found will be found in such amounts as to warrant the establishment of a smelter?

I feel the Minister is right in conducting, as he proposes to do, a feasibility study but perhaps what we were told before Tynagh was established might prevail on the Minister and he might have reason to believe that the amount of minerals here is not sufficient to warrant the establishment of this smelter. It came as a surprise to many of us that we had mineral wealth of this kind. While the discovery at Tynagh and across the Shannon in County Tipperary has given high hope to many of us, the Minister is entitled to have this feasibility study. Speculation about where minerals are appears to be useless. Until the minerals are actually discovered, it is pure guesswork.

The activity we have seen over the past few years and the number of licences granted by the Minister for Industry and Commerce enabling people to drill for these minerals, have been not inconsiderable. I think there is hardly a county in Ireland where some company or other has not carried out drilling operations in an effort to discover the existence of minerals. Therefore, I think the Minister is right in this Bill in deciding to have a feasibility study, in so far as a study can be carried out, as to where mineral wealth lies.

Canada is a highly-developed mining country. Mining operations are commonplace there. Drilling operations take place practically every day in some part or other of that country. Many people believe that minerals exist in great wealth in Ireland but, as I said previously, it is only a matter of speculation. The Minister is certainly entitled to have this feasibility study, for whatever it is worth, before he gives a smelting licence to any private concern.

The export of Tynagh concentrates last year meant something like a difference of over £3 million in our exports: I think the figure might be nearer to £4 million. It is a pity these concentrates could not be worked in this country. It is a pity that we have not got a smelter. However, we must be sure that, wherever the smelter is to be erected, the amount of work it will get will warrant its establishment. I do not think we take any great risk in that it is proposed to give to private interests the right to smelt. I take it that that means that the State will not be involved in any capital expenditure of a nature that might guarantee no return of any kind.

In reading through the Bill, I see that it is in the discretion of the Minister to grant smelting licences. I feel sure we would be well advised (1) as to the necessity for a smelting plant and (2) as to the bona fides and the qualifications of the people to whom a licence would be granted. It is well known that there are a fair amount of chancers about in mining circles so that, in the granting of a licence of this kind, it is essential to ensure that whatever company is granted the concession of a licence will be above board, will be highly skilled in this type of work and will not be a fly-by-night as is so usual in mining operations generally.

Finally, I should again like to say that any development of this kind that proposes to give a promise of more employment for our people is a step in the right direction. I think the measure will have the support of this House (1) because of the possibility of increased employment and (2) because no State capital expenditure is involved.

Mr. James Tully

I should like to make a short comment on the Bill. I am quite sure that practically everything that can be said about this matter has already been said. We consider that the Minister is wise in agreeing to have the Bill introduced for the purpose of setting up this feasibility survey. The people in the west of Ireland, centuries ago, were not as forward as we were in this part of the country and very little mining was done there. Tynagh was discovered only recently and that is now to the benefit of the people who live in the West and, as a matter of fact, to the whole country.

I am particularly pleased with the way things are going. As the Minister is aware, I was associated with the mining people when they first came in here. I attempted to give them some encouragement when encouragement was not forthcoming from many official quarters. If ever a firm had growing pains, certainly the mining interests coming into this country had very severe growing pains. As Deputy Carty said, everybody seems very conscious of chancers in mining. Rumours of many chancers being engaged in mining spread to this country. When those people came and were prepared to spend their own money—they did not look for money from the State—they were viewed as if they were just another set of chancers and had extreme difficulty in establishing that they were interested in mining whatever ore could be found here. I am particularly pleased that they have been successful in finding not alone one mine but two mines and whatever may follow.

I am not as pessimistic as Deputy Carty that possibly there may not be much ore here apart from what has already been discovered. I am under the impression that there are very substantial ore bodies that have not already been discovered and, therefore, if smelting is started, it will be an industry here for many years to come.

It is unfortunate, because of contracts that had to be signed to get the necessary finances to develop the mining as far as it has gone, that it was necessary to have contracts of fairly long duration with some foreign people for the purpose of having the ore smelted abroad. As the years pass by, those contracts will eventually run out. I believe that the smelting of ore is a really big moneyspinner. The balance of payments had an additional almost £4 million as a result of last year's ore exports. I am quite sure that, in the years to come—I commented on this before in this House— the balance of payments income from the ore, particularly the smelted ore, will make a very substantial favourable impression on our present adverse trade balance.

As a matter of fact, a person very close to this whole matter told me about 12 months ago that, within three or four years, it is quite possible that there will be as much ore exported as will equal or almost equal, our revenue from our present entire export of cattle. If that situation does arise, shall we have people saying, in effect: "Now that our balance of payments is right, we can do a lot of things" which, admittedly, we cannot do now because our balance of payments is going wrong? It will be interesting to see if we shall. I hope to live to see it.

It is true that an effort was made by the State some years ago to do something about mining but it fell pretty flat—and that is putting it mildly. Normally, I should be inclined to ask: "Why does the State itself not try to develop mineral resources?" In view of the financial situation in this country now—and I am afraid for a number of years to come—we should be grateful to people who are prepared to come in and invest their own money, not on a "dead cert" because I am told that in mining if one out of 17 turns up right, that is considered to be lucky. This is being done without asking the State for money and eventually the State will get considerable sums of money through royalties, so in their own way the people working there will be contributing to the finances of the State.

The extension of the tax reliefs in the Budget in regard to mining will encourage more people to invest in mining. We want people who know their job, and we want people who are prepared to expend money trying to develop mines. We have had our share of fly-by-nights. We have had the odd man who was hoping to make a million overnight, as the saying is. They discovered this was not the place to make it. There are a number of firms here who are genuinely interested in developing our mineral resources and, incidentally, making some money for themselves, which is a human reaction.

I want to conclude by saying that I think this is the right approach. The Minister's suggestion is the only approach which is likely to yield results. I am afraid that I would consider the Minister's two years a little optimistic. I would imagine that it would be four years rather than two. I understand that the figure for a smelter is between £4 million and £8 million.

Mr. Sweetman

£15 million.

Mr. James Tully

The Deputy probably knows more about it than I do.

Mr. Sweetman

The Imperial Smelter at Avonmouth was £15 million.

Mr. James Tully

I am told that the figure is between £4 million and £8 million. If it is £15 million, that would add a couple of years to the period I mentioned. It does not matter whether it is done in two years or four years. The Minister is approaching this in the right way. I hope that in years to come, whatever Government are in office, we will be able to say that in 1967 the Dáil approached this matter in the right way.

Mr. Colley

I think it is clear that this Bill generally has got a welcome from all sides of the House, subject to a point raised by Deputy Sweetman arising out of a paragraph in my opening statement. Apart from that, one or two small points were mentioned which I would like to dispose of first. Deputy Sweetman inquired as to the type of smelter which might be set up. I cannot tell him because this is one of the matters on which the feasibility study will report. I can tell him in so far as any estimate is worth while at this stage that it is estimated that the capacity of the smelter will be 100,000 tons of metal. Deputy Flanagan talked about the advantage of setting up the smelter near Birr.

Mr. Sweetman

100,000 tons concentrate or metal?

Mr. Colley

Metal.

Mr. Sweetman

Per annum?

Mr. Colley

Yes.

Mr. James Tully

There is no estimate of the amount of ore which will be processed?

Mr. Colley

No. As I have already made clear, this Bill is largely designed to enable a feasibility study to be carried out. We must face the possibility that the result of the feasibility study might be a recommendation that we should not have a smelter at all. That is a possibility. We have to find out whether we should have one and even though it might be economically desirable, whether it is financially possible. That is all part of the feasibility study.

Mr. Sweetman

Before the Minister leaves the feasibility study, has he any idea as to the cost? What is the investment in the feasibility study?

Mr. Colley

I am afraid I have not got that figure but I know it will be substantial.

Mr. Sweetman

It will be in terms of £s rather than halfpence.

Mr. Colley

It certainly will.

Mr. Sweetman

I was wondering whether the Minister was working on any basis even "of the order of" without getting down to real estimates.

Mr. Colley

No. As I was saying, Deputy Flanagan recommended the virtues of an area near Birr for the location of the smelter. I am sure he appreciates the fact that the location of this smelter is not a matter on which the Minister for Industry and Commerce will be in a position to give any direction, or want to. Indeed, one of the items to be covered in the feasibility study will be the location of the smelter. I was intrigued by the fact that Deputy Flanagan made that suggestion because someone around there seems to think the smelter will be located there. I have already had representations on this point from the Parliamentary Secretary, Deputy Lalor, and from a Fianna Fáil candidate in the forthcoming local elections. I do not know who started this story.

Mr. Sweetman

Is it not almost certain that the smelter would have to be at a port?

Mr. Colley

That has occurred to me, but I am not an expert on this.

Mr. Sweetman

Neither am I.

Mr. Colley

I want to deal now with the main objection which was raised to the Bill. Deputy Sweetman suggested that to proceed on the lines proposed in the Bill—in other words, to allow one group to get an exclusive licence to erect a smelter—would operate to prevent further exploration in Ireland. If I thought that this was so, I certainly would not recommend any such proposal to the House. I have no reason to believe that it is correct. I might point out that as we all know, in recent years there has been a tremendous increase in activities in exploration and mining. All this has taken place at a time when there was no smelter in this country, and up to recently there was not even a remote prospect of having a smelter. It seems to me, therefore, that the possibility of the procedure outlined here affecting other exploration is, to say the least of it, remote.

It also seems to me that when one considers this matter, one starts off on the basis on which Deputy Sweetman started off in his remarks. He said that he and I, everyone in this House and everyone in the country wanted a smelter here, and that is true. Knowing this situation I arrived at my decision. I was faced with this prospect. We all wanted a smelter. One group who were concerned with mining in Ireland had the initiative to embark on what might be called a preliminary study, a study preliminary to the feasibility study. They had gone to considerable trouble and expense in this connection. They had taken the initiative in doing this. No other group I am aware of had done so. If they did, they did not communicate with me about it.

I was faced with the prospect that if these people were to go ahead with their feasibility study, a Bill on the lines which I have introduced here was necessary, because not only was there the question of the technical aspect of the smelter but also an important part of the feasibility study was the financial aspect, whether the necessary finances would be available from the international markets to support this kind of operation. I was told and I believe—and this is the advice I got and I think it is correct—that in order to enable such financial support and investment to be made available, a provision such as is in this Bill was necessary.

I do not think it is disputed that the chances of there being room for more than one smelter in Ireland are nil and therefore I was in the position where I had either to introduce a Bill which would enable this initiative which had been taken to go forward to enable us to find out whether we could have a smelter or, on the other hand, wait to see whether other groups might be interested or whether they might be willing to get together on such a study. It seemed to me, on weighing up of the two prospects, that having regard to my fundamental responsibility in this regard, which was to get a smelter going in Ireland, if this were feasible, the only practical course for me to adopt was the one which I did adopt here, to follow up the initiative which had been taken by this private group. Let me make it clear that even though I propose, as I have said, to give an exclusive licence in this regard, it is a conditional licence in that if at the end of the feasibility study, it appears——

Mr. Sweetman

But it is a licence by which the Minister is committed if the conditions are fulfilled. Is that not so?

Mr. Colley

This is so.

Mr. Sweetman

That is not what the Minister indicated.

Mr. Colley

I am going to deal with that point in a moment. If from the results of the feasibility study, it appeared that a smelter was a sound practical proposition but for some reason this group did not want to go ahead, they do not of course continue to have the exclusive rights to erect a smelter and I would be quite free to deal with any other group which wished to do so. Furthermore, it is a mistake to confuse a smelter with mining. Clearly, it is not necessary that the group proposing to erect a smelter should within their own control have sufficient mineral resources to justify a smelter. Indeed, as I have said, it is likely that the smelter would outlast the resources which might be available and we must contemplate at some stage that we might be importing ores to keep the smelter going, as happens in other countries where there is a smelter. Therefore, it should be clear that it is not necessary, in order to have a smelter, to ensure that those responsible for erecting and operating it should have within their own control sufficient mineral resources to use up the capacity of the smelter.

Further, it does not seem to me that there is any reason why the other groups already operating here, or who will in the near future be operating mines, if they are interested in a proposition such as this, should not be in a position to make an approach to the group concerned and perhaps share in the cost of the feasibility study on terms to be agreed with them. I do not know what the reaction of such group would be, but on the face of it, it appears to be a reasonable thing to do if the other groups are interested.

Mr. Donegan

But if this Bill goes through as it is, these people will be approaching the licensees in the form of poor relations.

Mr. Colley

As of now, the thing is only at the beginning of the feasibility study and nobody knows the result of that. It seems to me that any groups who are interested would want to go along now, if they are genuinely interested——

Mr. Sweetman

I can see that, but I also see that it is the Minister's job to get the people concerned rather than to say to one particular group: "You are the favourites". I do not mean that in any unpleasant way.

Mr. Colley

This misrepresents the position somewhat. It was not a question of the Minister saying: "You are the people to do this". It was a question of one group and only one group coming and saying that they had already expended considerable time and money on a preliminary study. No other group approached me and I am not aware that any other group had taken any steps in regard to the erection of a smelter. The reason for the decision was based on a belief that if I did not do it in the way I had done we might never get a smelter, or if we did, we might have been delayed many years before the various people got together and decided whether or not they were interested in embarking on this feasibility study.

Deputy Sweetman made a point about which I am somewhat concerned. He referred indirectly to a conversation which I had with him some time ago.

Mr. Sweetman

I was trying to avoid saying it was a private conversation.

Mr. Colley

I think it better to say out straight what did happen in regard to this Bill. It is true that when he was speaking to me and when we discussed it, unfortunately I did not have before me my papers in this regard and it had been a considerable time since I had dealt with this matter. Therefore my recollection was not too accurate, as I think I told the Deputy at the time.

Mr. Sweetman

As you told me on the first occasion I saw you.

Mr. Colley

Yes, I think on the only occasion. Subsequently the Deputy met my officials.

Mr. Sweetman

And subsequently I saw the Minister with some other people.

Mr. Colley

Yes. The point raised by the Deputy was not raised at the time.

Mr. Sweetman

Was I not entitled to assume that what the Minister said to me at the first meeting still stood, unless he contradicted it? I accept freely that the Minister had not the file with him but in other respects his memory is slightly at fault.

Mr. Colley

The fact is that on that occasion Deputy Sweetman asked me whether I was committed in this regard to one group and I did say I was not. There were two reasons for this. One is that the situation is as outlined in the Bill. I am not committed in the first instance. Unless they go ahead and build the smelter, I am not committed. The other reason is that it was some time since I had dealt with this matter and I told the Deputy that this was so and arranged for him to meet some of my officials to go into the matter in more detail. Subsequently, on going into the matter, I discovered that what I had said to Deputy Sweetman could be deemed to be misleading and therefore I proposed to write a letter to him confirming what the position was. However, I was advised by my officials that there was no necessity because the matter had been discussed and made clear by the officials.

Mr. Sweetman

I deny that categorically. It was made quite clear in respect of another point. If I may say so, there were two points. One was the commitment and the other was the prohibition of exports. It was made crystal-clear in regard to the prohibition of exports but it was never mentioned in any way at all in relation to the other matter.

Mr. Colley

I wish to apologise to the Deputy.

Mr. Sweetman

No.

Mr. Colley

If that is the position, I want to assure him I realised afterwards that what I said could be regarded as misleading and I had intended to notify him, but I did not do so because I believed that the position had been made clear.

Mr. Sweetman

I accept the Minister's bona fides but I am afraid the information he has in relation to the commitment is entirely incorrect. I think the Minister will confirm that when he and I and some other people met, the commitment was not mentioned.

Mr. Colley

That is true. I thought this was so because I understood that the group in which the Deputy was interested were not, in fact, interested in smelting.

Mr. Sweetman

I told the Minister we were.

Mr. Colley

It seemed to be a very remote possibility so far as the Deputy was concerned.

Mr. Sweetman

A year's possibility.

Mr. Colley

The position is that if the people who are operating mines in this country, other than the group concerned in advancing this feasibility study, wish to have their concentrates smelted through the smelter in Ireland, they would, of course, be entitled to have this done and it seems likely that they could have it done at rates which would be at least competitive with those to which they are subject at present, having regard to the lower cost of freight involved. It is also true, as I said in introducing the Bill, that if they do not wish to avail of the smelter, they would not be compelled to do so, so that I do not think there is any loss at all from their point of view, other than the possibility of their being, if you like, in on the ground floor on the setting up of the smelter.

I have tried to make clear to the House that, as far as I am concerned, if they want to approach the group concerned and arrive at some arrangement with them, I should be only too happy with such an arrangement but I do not want to see a situation in which progress with the feasibility study for a smelter would be held up while certain groups perhaps jockeyed for position between themselves. My interest is to get a smelter erected in Ireland as fast as possible and if one group has taken the initiative and incurred the trouble and expense it has incurred to get on with the operation, I do not think I need make any apology for allowing such people the right to go ahead with the feasibility study and erect a smelter, while at the same time, I have made provision to protect the national interest in this regard by providing that, if they do not go ahead with the study, or if they do not go ahead, having completed the study and it is favourable, I am not tied in any way to this group.

What they are getting arises from the fact that they took the initiative themselves and spent money on this project. What they are getting is the right to go ahead with the feasibility study and, if the project should be a proposition, to go on with it within a limited time and erect the smelter. If it is a proposition and they do not go on, other people will presumably do so, and certainly as far as my Department is concerned, they will be dealt with, bearing in mind that what we want to do is get a smelter as fast as possible.

We must remember that in fact there is nobody involved in smelting in this country at the moment and it is simply a question of getting a smelter as fast as we can and not, for reasons that might appear to be plausible, finding ourselves in the position that we are standing back waiting for private groups to get together and agree on various conditions between themselves, or perhaps not agree at all—while we are standing back and this is going on, time is passing and the possibility of erecting a smelter might be receding. As Minister for Industry and Commerce, I do not think I should lean so far backwards in trying to allow everybody who might be interested to make up his mind as to whether he is interested or not that the national interest would be seriously affected by not having the project for the smelter go ahead as fast as possible.

Mr. Sweetman

Does the Minister not think that a fair comment would be the comment he passed to me, since he mentioned it, that he should not commit himself until he had published notice of his intention and that the Bill is the notice of his intention?

Mr. Colley

This would be so if this were feasible for me but it is not feasible because the failure to adopt the procedure here would mean that we would have to wait until everybody had a look at it and decided whether they wanted to go ahead and if so, put forward the proposals as to how they were going about it.

Mr. Sweetman

I find it very difficult to understand the Minister's assurance to me, while I accept his bona fides.

Mr. Colley

I want to repeat that I have no reason to believe that in any way the procedure outlined in this Bill would retard mineral development. The development of a smelter and mineral development are two separate things and what has happened in the past, without any question of a smelter here, would indicate that there is no reason why mineral development should not proceed at an increasing pace.

I hope I have outlined to the House sufficiently accurately the factors which operated so far as I was concerned in arriving at the decision embodied in this Bill. I believe that procedure is the one best calculated to ensure that we shall get at the earliest possible opportunity a smelter erected in Ireland, if that is in fact a possibility. Again, I want to make clear that it is quite conceivable that the results of the feasibility study will be to indicate that either for technical or financial reasons, the erection of a smelter in Ireland may not be a proposition. We must be prepared for that, but I feel that this measure, in recognising that we should ascertain the position as far as can be done and that if the proposition is found to be a sound proposition we should go ahead and get a smelter erected as soon as possible is sound. I believe that this Bill will enable that course to be followed better than any other possibility that was open to me.

Question put and agreed to.

Committee Stage ordered for Tuesday, 16th May, 1967.