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Dáil Éireann debate -
Wednesday, 2 Feb 1977

Vol. 296 No. 5

Bula Limited (Acquisition of Shares) Bill, 1977: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

One of the important elements of the development of natural resources is the need to have a good balance between the needs of State and those of private enterprise. There has been a lopsided development in the past but as a result of this Bill we will get the balance necessary so that the State can participate in a meaningful way. It is not desirable that the State be the major shareholder. In my view the 49 per cent shareholding which the State has is sound because the controlling interests who have the expertise and the years of experience of this type of development will still be running the industry. At this stage of our development it would not be desirable for the State to have a controlling interest.

The fact that we have two mining companies operating in this area is causing concern. Obviously, and for reasons that are well known, they are at one another's throats but now that the State has one-third of the control of the development here it should play a major role in an effort to get the mining companies working together. We are all aware that the cost of separate development and providing the expertise for this development is too high to be duplicated. I hope the Minister will succeed in bringing these companies together. If he succeeds, he will get the maximum output from the mines for the benefit of the companies and the State. I commend the Bill and hope it is passed by the House quickly so that we can get on with the business of developing our resources and the establishment of a smelter plant. Many jobs will be created as a result of this and that is what we need.

The facts that have emerged so far in this debate from the Government side could best be compared with a small boy who put his hand into a sweet jar with a very narrow neck and, having grabbed a big handful of sweets, had then to look at the alternatives open to him. The boy could not get his hand out of the jar because of the number of sweets he had grabbed but if he dropped some of the sweets he was holding he was afraid that the jar might not be there when he would return. That is the position the Minister created for himself in December, 1975. He had no need to do so in this case because he had all the powers of the State behind him and plenty of time to do the right thing as far as the people of the country were concerned.

We are entitled to expect from a Government behaviour different from the behaviour of a small boy which I have just mentioned. It gives me no pleasure to see a Minister with egg on his face, as has happened on this occasion, particularly when it arises out of a situation relating to the exploitation of our natural resources. He knows what my recorded views are in regard to the development of natural resources for the benefit of the people. We know that we suffer from lack of capital and expertise. When it comes to owning and controlling the exploration, production and downstream development of our natural resources we therefore have to get ourselves into the position where we can go into partnership with those who can make up for these deficiencies. But there is a right way of doing so and very many wrong ways of doing it. In our view, the Minister has chosen one of the many wrong ways open to him. Tricking around with shares whether obtained by purchase or by gift, is not in our opinion the proper way to do it.

Purchase of shares in an established mining operation is recognised the world over as being risky because mining itself is a risky business. Accidents will happen; production will be affected and market prices change; metal usage changes. This is certainly no place for the innocent. It is particularly no place for the foolish but it has been and always will be a place for the greedy and the losers. As we see it, the Minister has become one of the losers before he even starts in this case. He has really put himself on a highway to nothing. And we ask: for what? A minority share in a mining operation with an uncertain start-up date, an undetermined capital requirement, unproven production plans, unproven viability, limited management experience in metal mining and no marketing plans that we know of. Surely the Minister will not continue to argue the justification for this payment.

Before he continues to do so, I want to point out the position of the Minister in regard to his approach. In the Navan area he will be a 49 per cent shareholder in Bula Ltd., a private company with no stock exchange quotation. He has already obtained or will obtain a 25 per cent share in the adjoining mining operation owned by Tara Mines Ltd. This company's shares are dealt with on stock exchanges in Ireland, England, Canada and the US. He knows that the supervising authority for all shares traded in on the American Stock Exchange is the Securities Exchange Commission. He also probably knows that American shareholders have become quite accustomed to litigation between themselves and company management; it is not uncommon over there.

Now we come to the Minister's most important position in this case. He is the regulating authority for mining licences, exploration and production. We have heard and read much about the diversion of the River Blackwater. I understand that a condition imposed by the Minister in granting a mining lease to Tara provides for what in effect is a facility to be extended by Tara to Bula in regard to the river diversion. He has therefore already imposed as a condition of a mining lease a basis for cost for Tara, a company with American shareholders and in which he has rights over 25 per cent of the shares. I have read many estimates of the possible cost of this diversion; they range from £2 million to £10 million. Has he considered the possibility of inter-shareholder lawsuits before the American courts because of his 49 per cent shareholding in Bula? Whether he realises it or not, it is a distinct possibility.

Has he considered the effect of his position as Minister for Industry and Commerce of being involved in such litigation whatever the outcome might be? The Minister has made visits to the United States and Canada, very properly supporting the efforts over there of various State boards and companies to expand our exports and promote interest in Ireland as a base for American capital and industry. He knows as a result of his first visit that despite the size of the USA, the financial club there is very small. We can imagine what the effect will be and we can easily judge the effect on the economic development of this country as a whole. For what are we putting ourselves at such risk? The uncertain return on shares costing £9.54 million in a small mining operation at Navan. Where is the evidence there of the broad view necessary to the development of our natural resources? It may be that the Minister's strategy is to use Bula concentrates to feed an Irish smelter. That would at least ensure a market for Bula concentrates but Bula has a limited life of perhaps 12 or 13 years and we ask: what happens then?

We come back to the Bill which provides for the payment of £9.54 million, starting next week. The Minister knows that there is a surplus capacity of zinc refining; in fact, existing smelters are at present operating at 60 to 70 per cent capacity. He knows that even a Government financed smelter with present day costs would never achieve viability or be able to produce and sell refined metal with such underutilisation of existing capacity. Bula is not part of an international group; it is very much more a once-off effort. It is not even potentially a rich mine with ore reserves or high mineralisation. There have been details of a new proven mine elsewhere with over 30 per cent mineralisation which is not being pressed into production at present by its owners because of the level of world demands for lead and zinc.

We must remember that the mining business is and always was a "Big Boys' League". The Minister in this case has been out-manoeuvred. He should examine whatever means are now open to him to extricate himself or delay finalisation of payments referred to in this Bill. On this side of the House we will wait until another day if he says he will have another look at the Bill. We shall not think any the worse of him if he comes back to say that he has changed his mind. In the hope that he may do so I want to tell him what our approach would be in the Navan situation. First, we would recognise that we require development of the orebody using other people's expertise and money but obtaining the greatest benefit for the people. We would want job opportunities, contributions towards necessary infrastructure investment, revenue based on sales realisation. Royalties in our opinion represent the safe way to obtain a monetary return: taxes are another way. A combination of both may not be popular with the mine owners but that is where a balance has to be struck, taking into account a fair return for expertise and capital encouragement for further explorations. It is one thing to dangle a carrot. The Minister is paying the interest fee in this case and the bill for the whole Bula affair. We should be prepared to be flexible but we should be firm. We have the expertise at least to ensure a fair return for what is Irish-owned. We know enough now about inter-company billings and transfers, commissions and rebates to ensure a fair return on the money. It will be no part of a Fianna Fáil policy to provide windfall profits to shareholders for the exploitation of Irish resources. Above all, it will not be Fianna Fáil policy to commit scarce capital resources to unproved risk situations, because that is what this Bill is now doing. It provides tax-free windfall profits for shareholders who did not even discover the existence of the ore in the first instance. It makes no contribution towards bringing the production one day nearer commencement in this case because it is no aid to the commencement of the mine's production. It makes no contribution towards providing one job. Can you wonder then why we oppose this measure? We are not playing a game. We are dogmatically against the Minister's approach. We say it is wrong and we demand it be corrected.

During the Minister's contribution we noticed that the Minister takes the opportunity of benefiting himself by association with the other mining company in its commencement of production of the Navan orebody scheduled for this year. Just in case anybody might believe in this case that it is Bula which is starting to produce this year, as one might be expected to believe having regard to the fact that we are dealing with Bula in this debate, it is Tara which is starting production.

We expected to hear facts from the Minister but what we have had is an irrelevant history lesson here yesterday. The few facts he has provided caused the greatest misgivings. The Minister said that he has a report from the London School of Mines recommending that, for safety as well as other reasons, the river should be diverted sooner rather than later. We should like to ask when did he get this report? If he got it prior to December, 1975, when he signed this agreement, what clarification did he obtain from the Bula management and why have Bula not included any proposal for the river diversion in its planning application at present before the planning authority? Is this an admission of his knowledge of the inadequacy of the application now being considered at great length and at great expense by the local authority? If he did not know, surely, as a contracted buyer for £9.54 million of 24 per cent of the shareholding, the management acting on behalf of the shareholders getting our money from the Minister should be dismissed for acting in such a negligent manner. But, then, perhaps this is just a continuation of the saga exposed here by my colleague, Deputy O'Malley, of nobody telling anybody anything.

When the Minister rambles through the maze of valuation he puts his finger on what may be the explanation for all the confusion about this matter. Under the heading "Are we Getting a Good Bargain?", the Minister seems to be asking a question. I thought that as he is about to spend £9.54 million he would be in a position to give us some answers. He said that it was agreed between the State and Bula that we would have the price for the 24 per cent element settled by independent arbitration. He goes on later to say that with each side employing well-known experts in order to put their best case forward the end result was that the estimates of the value— and here I am quoting directly from the circulated copy of the Minister's speech—of the private minerals in question varied from £1 million to £106 million. He then goes on to say that this may seem to be an extraordinary situation. It is, for reasons other than those considered by the Minister. We are not being asked to approve the payment of £9.54 million for 24 per cent of the value of the minerals. The Minister's Bill in this case requires the money for something completely different. It is required to purchase 24 per cent of the shares in the company, not the mineral value of the company.

Is this the reason for all the confusion about the value of the shares, then? Were the arbitrators valuing the minerals and were the Minister's financial adviser or advisers valuing the company? Is this where everyone has gone wrong. Or, is it that the Minister was unable to distinguish the difference? If this is so, he should be condemned for his ignorance of the matter.

The Minister says that he accepts the decision of the three arbitrators. We must ask the questions: had he any option but to accept and was it the decision of all three arbitrators in this case? If they made their decision based on the assumption that planning permission will enable Bula to develop the mine in an economic fashion, as he says, then they were wrong. Decisions on planning applications are based only on considerations of proper planning and development and they have no regard whatever for the economic consequences of the planners' decision.

The mystery of the diminishing value of a natural resource should be a mystery no more. The reason that value diminishes is that there is only a certain amount there in the first place. It reduces with every day's production. So, in the end, it all becomes exhausted. This investment is for real and it is real money that is being paid next week. That is why people like Lazard, who are experienced and responsible in the spending of depositors' money and are answerable for what they do, who know what the rules are, valued on the basis of a discounted cash flow.

Finally, the Minister says that even if the mine does not start in the foreseeable future it will not matter as our money will be safe in the ground. This is, surely, a new concept of economic development, namely, plant your money in a zinc mine and watch it grow in the ground. Is he really serious when he says this?

I am in sooner than I expected to reply to the Second Stage debate. I want to divide my reply into three sections. I want first to talk about the question of the valuation, the arbitration and the accusation by the Opposition that we did not know what we were doing, that we were duffers. That is one section. Taking the speeches by and large, that was the core of their attack on this Bill and on my own handling of the whole matter of mineral development.

There is a second matter to which I referred at length in my opening speech and I was very interested to see the almost total evasion of it by the Opposition, and that is what I would call the chronology of past events, or the road we went, whether it is a mess or not, what the timing of getting into that mess was, and what should be done to get out of it. In other words, the continuing analysis of the actions of my predecessors, whether they were capable of being brought to a successful and advantageous conclusion, whether I should have gone on reiterating their policy as I was urged to do today.

The third point, again untouched by the Opposition, was whether there existed here two strategies about our mineral resources, the strategy of the Government and that of the Opposition, whether they are really the same, whether the protestations of the Opposition that they want the greatest possible benefit for the Irish people is the hypocrisy of an election year, or whether it can be validated in any way by their past actions when they had power and by their enunciations of policy by their spokesman now that they are out of power. Those were the three areas.

First, were we professional, were we expert, were we thorough, were we responsible in the question of evaluation? Secondly, is existing policy and legislation as inherited by me adequate to carry the burden of the policy my predecessor was trying to carry through? If not, what are the alternatives? If it had been carried through, where would we have ended in terms of national interest? These areas were not touched by the Opposition. They had better not because, when they look into it, they dare not. Thirdly, are there genuinely two strategies, or are we all trying in our different highminded way to maximise the advantage for the Irish people? Is that what we are doing or is that a mounthing of platitudes by the Opposition to cover the exact opposite, because that is the truth I will maintain in the finish?

Let me come first to the matter of arbitration. In that context I am reminded of a story which relates to someone who considered himself improperly committed to a psychiatric home. He was visited by a friend and convinced the friend that he was totally sane and that a great miscarriage of justice had been committed. The friend promised to go away immediately and try to secure his release. When the friend had gone ten feet down the passage he was hit on the back of the head by a heavy book which the inmate had thrown at him. He turned in fury and the inmate said "You will be sure to get me out, won't you?".

Deputy O'Malley's little mistakes yesterday add up to something much more than that. I want to talk about the "little mistakes" first and the psychological and policy significance under these little mistakes. This "little mine" for example, was the phrase used at the beginning and end of his speech. If you want to abolish it and amalgamate it into something else, you make it small and insignificant.

In 1974, there were only two lead and zinc mines in Europe bigger than Bula and in the whole world there were only about 17 bigger lead and zinc mines, and that is ranking in a world list of over 100 mines. Of the total new lead and zinc projects being considered worldwide in 1975, Bula was number 4. Bula, not the whole body but this "little mine" he would like to pull down and make insignificant. It is not little but belittling it is not an accident; it is a very systematic policy with a very clear end in view. The little silly thing shows among the welter of received actuarial information which is not understood, the great appearance of expertise and mastery. He talks about being 3,000 feet underground at two different places in his speech. Once may be an accident, but not twice. That is wrong in such a fundamental way that anybody who has any feeling for what mining, orebodies, dimensions or scales are like, could not have done it. That is not important but silly. That is the book on the back of the head. It says it is not great expertise; it is a carefully worked up performance of expertise which in reality covers ignorance and other people's information. That is the little point, and now we come to the sinister one.

I referred to shadowy multi-national companies quite deliberately. Deputy O'Malley said I really meant the Irish company. He said I had tried to tell the House that I was not really thinking of Tara Mines, or Tara Exploration or Northgate or Irish Base Metal —I was not thinking about them—but that I was thinking of people like Cominco, Noranda and others, who have little harmless shareholdings of 2 per cent, 5 per cent, 10 per cent of shareholdings in some of these Irish companies. Then he said that it was the practice of all mining companies to have these interlocking small shareholdings with one another. When he says "small" he is saying something bogus, something to conceal the truth. He went on to say that it is perfectly normal and perfectly harmless. That is the impression the little word "small" conveys, but it is not true.

The annual report of Tara Exploration for 1975 says that Charter Consolidated have 10.75 per cent, not a small shareholding in some of these companies but in the one we are interested in; Cominco which he mentioned have small, normal, interlocking shareholdings of 17.43 per cent; Noranda have small interlocking shareholdings of 19.93 per cent. Add the shares for those three companies and you are as near to 50 per cent as damn it, which Deputy O'Malley knew as well as I did. The small amounts of 2, 5 and 10 per cent were to cover the reality of his policy which is precisely to deliver one of the greatest orebodies in the world to those shadowy multi-national companies. I was not talking about either of the higher Tara companies; that is what I was talking about. Of course, little inaccuracies, little mistakes of that kind, are not important.

Could the Minister come to the issues, the facts that matter?

Do not rush it, friend; you will gag on facts before I am through. We got this work, as Deputy C. Murphy told us, of a distinguished actuary, who could not be named. No doubt he is a distinguished actuary but the exact scientific exercise prepared on an actuarial basis is wrong in fact and it is wrong in principle. He says that existing shareholders in Bula Ltd. obtain in cash and kind an amount of £29.81 million tax free which would have required earnings liable to tax of £298.01 million if they had to wait until the mine went into operation to generate profits. The Minister is not giving the shareholders £20.27 million for the 51 per cent interest they will retain in the company. I am buying on an open market valuation a 24 per cent interest in the company, a straightforward commercial transaction, and the value in the future of the shares which I bought and the 51 per cent interest which the shareholders are keeping will entirely depend on the profits the mine makes over its life. Deputy Myles Staunton dealt with that little exercise in phoney figures in the silence of the embarrassed media. Deputy O'Malley did not understand it. As I say, it was wrong in fact and wrong in principle and perhaps it deserves best the silence or the laughter with which it has been so widely received.

I have not heard any laughter or anything from the Minister to show it is wrong other than his unilateral statement to that effect.

But it is wrong.

It is dotty. I will offer the exercise to the financial journalists for their delectation. Deputy O'Malley set a figure for the prospects of the mine and I want to talk now about the figures for ore reserves and annual production and therefore for the mine life. These figures are publicly known. If I can find my way through my papers I will put them on the record again. The point can be made, I think, that I will not be saying anything that is not fairly widely available already. If Deputy O'Malley, with the aid of the experts he has been parading, cannot find the sort of figures I am now about to give, which he was calling for passionately yesterday when everybody knew them, if he has not got his own resources for looking up the papers or the help of the think tank, or any of those things, I am happy to give them to him again. As the Deputy knows, the figures for the reserves in Bula are estimated. He made a reasonable guess at it. He did not need to be told it. He was not too far wrong. They are estimates because total precision does not exist in these things. The figure, which is a reasonable figure, is 15 million tons.

That is the figure I gave yesterday.

Yes, but the Deputy was asking me for it. He had previously asked for it. I said he was not too far wrong.

What is the Minister sneering about then?

I said the Deputy was not too far wrong but he was making a great hooha about asking for it and my concealing it when it had been available to everybody for a long time.

That is the figure I gave.

What is the Minister sneering about so?

I said the Deputy made a pretence of the figure not being available. That is what I am sneering about. In regard to the grading of the mine a reasonable estimate of the reserves of Tara are 60 million tons. The grading in Bula is 7.9 per cent zinc and 4.1 per cent lead. Again these are estimates within the normal scientific range of error. The grading for Tara is 11 per cent zinc and 2.4 per cent lead. A reasonable estimate for the capital cost of development—and I will talk about the expertise that has been brought to bear on this and how the figures were worked out and their validity—is about £25 million. Capital cost for Tara, 150 million dollars and, if one were to revise that either way, it would be upwards. Construction employment in Bula, 400; in Tara 900; mining rate in Bula, 1 million tons per annum; mining rate in Tara, 2.25 million tons per annum; production employment in Bula, 250; production employment in Tara, 800; annual concentrate output in Bula, 134,000 tons zinc and 19,000 tons lead; annual concentrate output of Tara 395,000 tons zinc and 65,000 tons lead; estimated payroll —very approximate—£1.3 million or thereabouts for Bula and £3.4 million for Tara.

I gave all that yesterday.

No mystery about those figures, none whatever. They have been available to everybody for a long time. They are the sort of things that were being called for in parliamentary questions and elsewhere, the implication being that they were being concealed by me when in fact they were very widely available to everybody. Deputy O'Malley did two contradictory things. Having made the hooha about the information he then proceeded to demonstrate that it was widely available by using it in his own exercise.

When is production in Bula going to start?

We will deal with that. Do not rush it. The figures for all reserves and annual production and, therefore, the mine life are matters of public knowledge. Deputy O'Malley then made a calculation about capital cost, metal income, and operating cost and he said that left an average of 13.5 million dollars per annum gross profit over the lifetime of the mine. A recognised way of taking a view about the attractiveness of an investment, one very common and widely used yardstick, is to look at the payback period. Even taking Deputy O'Malley's figures, and they are very conservative figures, it can be seen that all the initial capital investment involved and all the State's payment of £9.5 million will have been fully paid back within eight or nine years of the commencement of the operations. That is on Deputy O'Malley's own figures. This means that all the income thereafter to the State from its shareholding will be profit on the State's investment. In effect, 75 per cent of net profits from the mine will accrue to the State.

I said Deputy O'Malley's figures are pessimistic. The ore reserve figure may well ultimately prove to be significantly higher and that could drastically affect the calculations. He gave a range of figures between £35 million and £45 million for preproduction capital investment. In my view the lower figure he suggested would be the upper figure of the expert estimates I have received, and estimates substantially lower have been made by reputable experts after detailed studies. His 30 million dollars a year to revenue makes no allowance for real price escalation. Admittedly, this is a point subject to legitimate debate. Of course it is, but it is something that has occurred in the past 15 years and if one, therefore, wants to draw on past experience as to whether it would or would not, it would be better to argue there would be such real price escalation rather than that there would not be. His average figures for production and concentration costs are $13 per ton for open-cast and $20 per ton for underground. These are too high. They are not supported by current or projected experience in Ireland.

Applying the pay-back formula and taking a very conservative view about the future ore reserve, making no allowance for real metal price escalation, making a realistic adjustment in the capital and operating costs, the pay-back position emerges as follows: all initial development costs and the State's contribution will be recovered by year seven. Since, as I said, 75 per cent of the profits thereafter will accrue directly to the State, the revenue involved for the remaining year is extremely large and the return on the State's investment will be handsome by any standards.

For five years.

Well, the Deputy can say that five plus seven is 12. We can play these games. Deputy O'Malley talked about investment science today. I do not deny that there is some science in it, but by training he is a lawyer and I am a scientist. Real science expects harder predictions than can be made in investment. We, for example, have referred to the range of figures from £1 million to £106 million. We told Lazards, and our brief was specific, that we wanted to negotiate valuation and the matter of arriving at a final arbitrator's valuation is very like the matter of buying a horse. The vendor goes in wildly high, the purchaser knocks like hell what he is going to purchase, a meeting point is reached and the deal is sealed. The purchaser is often quite pleased with what he got though he had been knocking it. Is it to be thought that with this negotiating valuation we will get a middle figure? Of course it is not, but since we have made great play on precision—Deputy O'Malley produced a set of figures vastly impressive to the uninitiated, which we were told today by Deputy Ciaran Murphy emanated from one reputable actuary in Dublin. I would have to consider this but we are dealing in an area where we are looking down, not just the years but the decades.

We are looking at an area where certain things like the gradings of lead and zinc in a bore-hole are precisely quantifiable and have been widely published for years and are available to everybody; where other things, such as the real evolution of costs, of wage rates, of metal prices and of exchange rates between different countries are not quantifiable in the scientific sense. Anybody who tries to blind the innocent with a mock parade of phoney exactitude is a cod. A great deal of what Deputy O'Malley was doing yesterday— ignorantly because he is a lawyer— was this sort of codding.

Deputy O'Malley in saying that what we are getting was ridiculous was depending on that sort of exactitude on the basis of the offer of one well-known and reputable Dublin actuary. That is cheating in a serious debate. You cannot have that. If you want to be fair you will identify the non-variables and you will identify the variables and you will discuss them.

Would the Minister allow me to intervene for a moment in order to clear the air? The point of my argument from start to finish was that the whole affair is so riddled with variables, extraordinary variables, that it is impossible precisely to quantify it in the way that the Minister has. What the Minister is now seeking to do is turn my own argument against me. I make the point that the Minister cannot be sure that 24 per cent of this is worth £9.54 million or anything like it. In fact, Lazard Brothers who are not going to make a false valuation for negotiation purposes, value the whole lot at £7¾ million.

I heard this as an observation but not as precise. It is an interesting point but it is a change of ground——

It is not.

——because I was being berated for my imprecision and berated for not doing these exercises. On the basis of information long available to everybody, which Deputy O'Malley offered with a great flourish, I have given some figures now if they make him happy.

Will the Minister give us the agreement?

The Deputy should not interrupt. I yielded to him and I think he abused that. I tried to listen to him in silence and I think I am due the same courtesy.

I said I was going to make three parts of my speech. The first part revolves around this matter of valuation and Deputy O'Malley challenges the findings of the Institute of Arbitrators Board. He says their valuation is too high. He said first that you can attain precision and that precision that you can attain proves that we paid too much. Then he says contradictorily that you cannot attain precision and therefore you have no basis for making decisions, so you should not act at all.

The practice of business, mining or any other, is precisely to make informed best estimates about wage rises, international events, currency fluctuations, the evolution of consumer prices and wholesale prices and all sorts of prices, in ways that you cannot precisely quantify with accuracy. If you were to say: "So you cannot act at all then because you cannot quantify with certainty" that is fine and you do nothing. Then you shift your argument around 180 degrees and berate us because we do not act.

Deputy O'Malley says the valuation is too high. In passing I would remind people that in 1974 the financial expert of an Irish paper valued the Bula property at £25 million then with all reserves that were less, with a metal price that was less. If you make adjustments on that—another man's valuation but he was a financial expert—only for the ore reserves, then you get something within the range of the valuation of the board of consultants. That 1974 valuation was in 1974 pounds. We are not paying 1974 pounds; half is being paid in 1977 pounds, a quarter in 1978 pounds and a quarter in 1979 pounds. Deputy Ciaran Murphy today waxed very pseudo-indignant about applying this counting to the fact that you pay some a year later and some two years later. This is a perfectly normal and correct practice with which everybody is familiar.

In the range of valuation the top and bottom figures are not realistic. They are what might be called sighting shots at each end but they demonstrate that the discounted cash flow technique will produce any figure almost if the variables are pushed to extremes. The valuation range that was considered by the board of arbitrators was approximately £40 million at one end and £63 million at the other end. That is the range. Once you have your sighting shots of £1 million and more than £100 million then you narrow in. Your next narrow-in is £40 million to £63 million. While this range of valuation would be affected by factors that Deputy O'Malley mentioned, an actual sensitivity analysis will show that it is not particularly sensitive to these factors.

The range of valuation is highly sensitive to three factors. Those are currency changes, metal price changes and the discount rate selected. Whether you go from the upper or lower end of the range will depend on how you answer some of the following questions. It is fair that I should make these questions explicit. For example, over the next 15 to 17 years will the sterling dollar rates vary to an extent which is not explained by relative US and UK inflation rates? Over the same period will lead and zinc prices increase faster than relevant costs and expenditures? What rate should be selected to discount the future cash loads so as to calculate their present net value? These three factors interact on each other and they must be analysed to identify the interactions and a decision must be made on any necessary adjustments. These matters were fully debated in expert submissions made by both sides, to the board of arbitrators who had access to expert advisers of their own and not surprisingly they took a middle view.

Deputy O'Malley can wax as mock eloquent and pseudo-outraged as he likes about the board of arbitrators, but he is taking them on and not me. They are reputable people and are a common internationally accepted recourse as a board of arbitrators for settling difficulties of this kind. I was taxed yesterday with going into this lightheartedly, being ignorant, being ripped off, and with being codded up to the eyeballs and so on. Anybody who has been in a Department like mine knows that every step of the way has to be highly analysed by experts and that a Minister is continuously subject to the best advice he can get. These are not arbitrary things from some guy sitting behind his desk and sticking pins and saying I will do X or Y.

I will indicate the range and depth of expertise that I have brought to bear on this problem. I have to assure people that if I did not indulge in these sort of exercises in public debate to put it on the record, in what are complex and difficult areas of expertise and areas of great variation, it is not because I do not understand figures, it is because I do understand and know how very little meaning a lot of these things have and especially how little meaning they can have when they are used for propaganda purposes of a partisan kind, and used by people who are not concerned to discover the truth but are concerned to score political points at all costs.

It is reasonable, in the Bula valuation proceedings, that I should indicate to the House the range of expert advice that I had and the thoroughness with which it was gone into. I had the Geological Survey Office. While I wish they had more money and more staff, I do not think anybody on earth questions their expertise or dedication or their scientific honour which is not perverted by me or by anybody else. I had the ICC which is not an agency of my Department but of the Department of Finance. They have a subsidiary called Mergers Ltd., so that I had financial and economic advice from the outset.

What figure did Mergers Ltd. value it at?

I said that I wanted to make my speech without interruption.

I am told that Mergers Ltd. said that the whole thing was worth £960,000. The Minister paid £9.54 million for less than a quarter.

That is extremely irresponsible, unsubstantiated and inaccurate.

If it is wrong tell us what Mergers Ltd. said?

I cannot, without warning of the question, give the answer to that. I have not memorised all the varying estimates I was given from various sources. I would be completely lighthearted in the way the Deputy is being lighthearted in regard to the record of this House, were I to put things on to that record off the top of my head on an unsubstantiated basis, as he has just done.

If I am wrong, would the Minister tell the House what is right?

This is just games playing, plucking figures out of the air. That is a perfect example of trying to score shallow debating points.

The Minister has been caught out.

I have not been caught out. I have no intention of trying to offer from memory a figure of that kind.

I also had the Institute for Industrial Research and Standards on the technical and environmental aspects. I had the Royal School of Mines, London which has very great standing in the world in relation to mining expertise. I was in touch with Dr. Brian White, a mining engineer there, who has been our technical adviser from the early stages, and who is intimately familiar with the mining/engineering and mining/economic aspects of the whole Navan orebody. I had advice from a Dr. Heidecker who is an economic geologist, working with Dr. White on the economic aspects. I had people of great professional standing who are proud of their reputation, who cannot be brainwashed by me or anybody else. I had the Economic Consultants Ltd. of London. Mr. G.N. Cox is their deputy manager there. I had Lazard Brothers of London, Mr. Fraser, Mr. Burrell, Mr. Anslow, Mr. Smith and a Professor Rybczynski in a series of roles.

Had Lazards enough time to do the study?

Lazards commissioned two consultants, a Mr. Thurmond and a Mr. Delaney in relation to mining and environmental aspects.

Can we have Mr. Thurmond and Mr. Delaney's reports for the benefit of the House?

Deputy O'Malley is resorting to persistent pin-pricking interventions in an effort to knock me from my theme, because he knows that I entered into this debate sooner than I had intended without being able to put my papers in order, because a speaker that both of us had expected to come in did not contribute to the debate. This is simply a lawyer's trick to see that the thrust of my ideas will be messed up and as frustrated as possible, because he does not like what is coming out.

That is not true. I think Mr. Thurmund and Mr. Delaney would have views on these matters which would be enormously helpful.

The State has very many relations with all sorts of people not employed in the civil service, as advisers, as consultants, people from whom it purchases with contracts, as people to whom it gives grants and advice, as people to whom it offers services and from whom it receives services, as people with whom it enters into commercial contracts and so on, some of them of a very extensive and detailed kind such as are carried out by the Industrial Development Authority, some of them which involve alienation of thousands of millions of pounds in gross value, of State property, like Tara Mines. In my years in my present job I have never received a request to reveal these documents. In regard to parliamentary questions about what the IDA does, be it taking shares or giving grants of sometimes comparable millions of pounds to what we are now considering expending, such questions by a tradition, initiated by the present Opposition are not answered. People are referred to the annual report. Anybody who has looked at that knows it is not very important. That is the accepted practice of this House both by the Opposition when they were here and by them since they arrived over there. In relation to one single company, which they want to disrupt, for reasons that I will indicate when I wind up, they demand a scale of publication which is unmatched in the public service in any country and which was never asked for by them in regard to any company in this country. We are entitled to ask why. That is a piece of the pattern which fits and it is a piece of the pattern which I will be putting together at the end. I would like to be permitted to move towards that end.

I want to talk about a crucial question which was carefully avoided by the Opposition. We had those heartmoving expressions of concern about the wellbeing of the people. The question they avoided asking was what is the take for the State under the different regimes? I would like to talk about that a little, about what my predecessors did and what we are doing because there is a crunch point there. When I saw people shedding tears for the taxpayers this morning, and for the lack of investment, I had to ask what sort of revenue the State received by our predecessors and what sort of revenue would be received by a continuation of their policy, as still advocated by their spokesman. The crucial question is: "How much for the State?". No Deputy addressed himself to the statement I made that under the previous regime with private minerals there were no royalties because they were private and there was no taxation because they abolished it and opposed its reintroduction. There was no participation because, as Deputy Barrett said, that was not the road to go. Therefore, from the private minerals of Ireland there was a zero return to the State.

That is nonsense. The Minister is wrong.

The Deputy should not interrupt. I am not wrong. I am absolutely right. From the public minerals, the State minerals, there was a royalty. We will also deal with that. We have some experience of what they did in pursuit of their policy. Over approximately the last 11 years 25 million tons of ore were mined at Tynagh, Silvermines and Gortdrum. The total we received in these magnificent royalties, which Deputy O'Malley still persists in telling us is the road to go, was 10p per ton. The total income accruing to the State in that period from those mines, from that 25 million tons, is something I should put on the record of the House. Those people who bleed for the taxpayers did not get in the money which was required for telephones, roads and the things the Opposition are so concerned about.

The Minister should not blame this for the bad telephone services. They were never more appalling.

They were brought in this morning. A sum of £2.8 million was received in that 11 years. That is what we got under their policy from the 25 million tons.

The Deputy is trying to do his best to put a face on it by interrupting. He cannot bear to hear it when it is coming at him.

Order. The Minister without interruption.

There are a few other figures which the Deputy will not like. Under the policy of the previous Government, which Deputy O'Malley was determined to continue, the State did not receive its full share. Deputy O'Malley and Deputy Lalor have asked why I did not continue what they were doing. I mentioned that we would have got from the entire Navan orebody, State and private, on the basis of their past performance over the years, £220,000 per annum.

The Minister knows that is nonsense.

It is not. I have extrapolated from what Fianna Fáil did and if the Deputy is ashamed of what he did in other places that is fine. I am extrapolating what the Deputy's party did in other places over those years.

(Interruptions.)

The Deputy does not like those figures. He likes the sort of bogus figures he wants to pick up but he does not like facts when they are coming back at him.

(Interruptions.)

Order. The Minister without interruption.

Deputy O'Malley has indicated they are determined to continue their policy. The Deputy is not prepared to listen to facts. It is nice to interrupt. As a result of the actions taken by the present Government we can now expect an income of at least £30 million per annum in constant money terms from the total orebody. Let me put it on the record of the House that that is 150 times more than our predecessors would have taken by the continuation of their policy.

That is wrong.

The Deputy ought to desist from interrupting.

Deputy O'Malley, as their spokesman on Industry and Commerce, yesterday advocated—his fellow members said the same thing today— a policy under which we would have got 150 times less. People bleed for what the State is giving away and what the State is spending. How about bleeding for what the State does not receive, for what is foregone, about 25 million tons of ore over 11 years— some of those orebodies are now gone —and about taking 150 times less from one of the greatest natural resources we have under their policy, which they still wish to continue, than under our policy?

There will be a Committee Stage and we will deal with it all then.

I want to deal with Deputy O'Malley's 20 points in a minute but before doing that I want to refer to some of the specific things he said. In the unedited transcript of his speech yesterday I see that he stated that the zinc concentrates from Tara will not be available for from eight to ten years. That is a nice example of people saying in a bald, unvarnished, unqualified and emphatic way without a doubt, something which is not true. That is a good old lawyer's trick. It does not matter whether or not it is right, say it anyway, it helps the debate, it is on the record. Under the Tara lease they are obliged to supply concentrates for an Irish smelter as from the anticipated date that the smelter will be ready, about five years from now. There is a similar obligation on Bula. In relation to the question of additional capital for Bula under the agreement with them the Minister cannot be compelled to provide additional equity or other capital for the development of the mine. Since my consent is required for any rights issue I have a control over that situation.

The agreement does not bind the State to afford a guarantee in respect of financing required for the development of the mine but the question of a guarantee may arise and it will be a matter, in the first instance, for the Government to consider whether, in all the circumstances of the case, they should assist by way of guarantee, which could of course be on a commercial basis subject to conditions. There is an existing well-established machinery for dealing with State guarantees which are granted in a number of circumstances, and that machinery involves reporting the matter to the Oireachtas so that there can be no question of anything secret or irregular being done. I think it is fair that I should also say, as someone anxious for this mine to come into production as rapidly as possible, that I would be a pusher, a goman, in that situation. I would want to see the mine rapidly capitalise, but I reiterate that there is no guarantee binding on the State to afford the financing required.

We are delighted to hear that, but would the Minister not publish the agreement rather than selective bits of it?

I want now to talk about the royalty alternative and then to deal with Deputy O'Malley's numerous points seriatim. On this royalty alternative, it was interesting to see the front breaking on the part of the Opposition in the persons of Deputy Lalor and Deputy Barrett, because with a little more practical knowledge they have their doubts about going the road of royalties or production or, as has been so eloquently said, the aspiration of the Irish State to put a man with a cap at the top of the mine watching the loads passing out and counting them. It is an interesting role in which to cast the Irish State in regard to mining development.

Let us see if this royalty question has any possibility of providing a mechanism by which to obtain a reasonable return for the State. It was interesting to note in passing that it was a system that operated in some instances in the last century. It is interesting because it comes from Deputy O'Malley. It is a last-century suggestion and is irrelevant to the present day for reasons that were found out a long time ago. I will repeat this to him, because although he has heard me say this before, apparently neither I nor the people on the other side who knew anything about these things could convince him that he should get back out of that blind alley as quickly as possible and not be nailing his party to something undesirable.

What are the objections? Deputy O'Malley knows as well as I do that you cannot tweak it up and down every year. You have to fix it for reasonable periods of time. If you were to tweak it up and down every year saying: "Last year was a bit hard on you; we will reduce it." Or: "This year you are doing better; we will put it up a bit", there is no way you could finance a mine on that basis. The banks will not wear that. There is no way even in vaguer terms that you could do the sort of calculations we were both talking about earlier. It is impossible in that way.

Therefore, you fix a royalty on tonnage for a period of time which will make it possible to plan a little bit, five years perhaps. What happens? The price of metal goes up and down. There is a boom and the profits are enormous but the royalty is fixed and a huge profit is being taken. That is not good. Then there is a slump.

Fix it at a percentage of the price.

Deputy O'Malley's suggestion was a man with a cap at the mouth of the mine counting the stuff going out when there are royalties on production. When you have a slump you still collect your royalties but there is no profit in the mineral, but you still collect it, profit or no, and so you shut the mine; you put people out of work, so it is silly that way.

Does the royalty not go down when the price goes down and go up when the price goes up?

All right. That makes it more complex and messy and makes it harder to finance. Of course, orebodies are not all the same. There is part of the orebody grading extremely high, but the barrels are being counted going out by the fellow with the cap. It is not enough. Then there is a place where the orebody is bad but the royalties continue to be collected.

At a much lower rate.

Yes, so a whole series of adjusters are built in which end up as being completely impracticable. If people would just read the history of tonnage royalties in the last century they would see that this had an extremely damaging effect on the mining industry, on employment, on investment and on growth. The other factor is that collection starts from the first ton that goes out, which was paraded today as an advantage, but that so loads the investment at the beginning of the process that there is difficulty with pay back and the total costs are put up. The front end of the process is being loaded in a way that is extremely detrimental to investment. I am not an expert; neither is Deputy O'Malley, but I would beg somebody on that side to get him off that hook, because as I said, the history of mining in the last century shows this process was messy and imprecise, extremely inflexible and damaging to investment, to employment, and also to the utilisation of the lower grades of ore. In fact, a worse way of taxing orebodies than a royalty on the volume of production, which is what the Deputy seems to want, would be very hard to find. It would also be arbitrary which is another highly objectionable thing from a planning point of view.

Before I go on to the second part of my speech, which is concerned with what I called at the beginning the chronology of the road that we went, I want to talk about Deputy O'Malley's 20 points. Perhaps they summarise the very essence of his speech. The various points provided great listening but do not read so well. I propose to comment on them one by one.

May I observe, that the first point is right. He says no planning permission exists to permit the mine to start up. That is true, but final planning permission in regard to Tara did not exist at the time of the Cominco bid. People make economic decisions when there are variables and the question of planning permission was extensively discussed by the arbitrators. When they took submissions on it they were aware of it. Had it been settled we would have to pay more. Had it been settled we would come to the matter a good deal later, because it is not going to be settled instantly. While that point is true, it is not an excuse for doing nothing. It makes action a little more difficult, but it is normal for people, State and public companies, for private companies and individuals to make decisions when things like that are not finally settled. That was taken into account by the arbitrators and argued, and the fact that it is not finally settled is reflected in their decision.

I want to make a wider point about planning permission—I am trying in a less organised way than I would wish to respond to different things said. As a Minister, I have some responsibility in the area of planning permission of mines and my officials will discharge that responsibility correctly and neutrally. We have a range of possibilities in regard to orebody, the part which is owned by Bula. One end of the range of possibilities is that it should be approached underground through the Tara tunnel and the other end is that it should be done open-cast by pit. At one end there is dearer production while at the other there is cheaper production.

We have experts on these matters here and an involved mechanism for dealing with planning permission which I respect. In regard to environmental protection I should like to state I was a member of An Taisce about 1959 and I have been a conservationist and environmentalist most of my adult life. What I want and what I believe to be possible is the completely neutral and correct exercising of their planning function by the relevant authorities, be they the local authority or the appeal board and it will be uninfluenced by me. It is not for me to tell them their job but the limitations on them would seem to come from two sides (1) they must protect the environment and (2) within that they must see that the economic resources of the country are developed. They must balance the two things together. As was correctly observed, there is a great deal of technology, of skill and knowledge involved and what one wants is the most appropriate trade-off between the protection of the people who live within the immediate environment and the interests of the people in the country at large to maximise the benefit. That trade-off position is to be technically determined by experts uninfluenced by me or anybody else for political reasons and if that costs a little money to the State and the country and if that disadvantages the basic economies of that mine so be it. It is a reasonable price to pay for the environmental protection of the people in the area.

I believe a reasonable meeting point can be found. I believe we can reconcile their protection with the exploitation of a great natural resource but that meeting point should be found technically and not by anybody trying to twist their arm. I give the undertaking that no such effort has emanated from me or will. I want the correct technical solution taken by the experts; I want the correct balance but it is not for me to determine or to influence that correct balance. It is for them to find it.

What about the river? Would the Minister deal with that?

I will deal with that later. The second point, that no detailed production plan exists, is not true.

Where is it?

It is in the agreement, no doubt.

The interesting thing about it is that it was stated baldly by Deputy O'Malley without he being in a position to know whether it was true or not. He just plucks statements out of the air without it being possible to know whether they are true or not.

I know it was true. How could one have a detailed production plan if one has not planning permission to produce at all?

Deputy O'Malley's approach to the facts and the truth is lighthearted. A detailed production plan does exist.

Might I have the permission of the Chair to interrupt the Minister for ten seconds?

I yielded before but it was abused. I will yield again.

Can the Minister tell me how it is possible to have a detailed production plan of exactly how and where and everything else it is proposed to get at this ore if planning permission has not been granted to take up the ore at all or the conditions about open-cast mining?

I have to tell the Deputy that mines and companies of all kinds, manufacturing all types of products, have a series of hurdles to traverse in reaching the point where they have a product for sale. They make more and more precise their plans as each hurdle is traversed. For mines and companies of every kind detailed production plans are prepared properly by widely understood and accepted procedures in circumstances where they do not have the sort of information the Deputy requires. That is absolutely normal commercial procedure and no business could get off the ground were what I am saying untrue.

The Minister does not know if it is going to be open-cast or underground mining.

To say that no detailed production cost estimates exist is, likewise, untrue.

It is true.

The Minister should be allowed to continue without interruption.

A great deal of sophisticated work by experts has been carried out on that subject and, therefore, the third point is untrue. The fourth point, that no detailed concentrates cost estimate exists, is untrue. There is the same sort of detailed work by expert people in that area. The fifth point, that no sales plan exists, is also untrue. We have these bald, tight, terse, unqualified statements casually read on to the record, definite affirmation of things although Deputy O'Malley could not possibly know whether it was true or not. That is a contemptuous and lighthearted approach to debate.

Would Lazard know?

I am being continually interrupted. It is an effort to disrupt the thrust of what I am saying and the reason is not hard to find. The sixth point, that no revenue estimate or schedule exists—I do not know what schedule means but I suppose it means the cash flow estimate—is untrue. The seventh point, that no capital expenditure estimate or schedules exists, is also untrue.

Is the capital estimate based on open-cast mining?

The capital estimate is based on a range of options. It does not make a firm assumption of the final form of the mine.

Since the capital cost of one is three times that of the other it is not much use.

The next point, that no quantifiable yield on the Minister's payment of at least £9.54 million exists, is also untrue.

What is the quantifiable yield?

A range of estimates have been made and at the lowest it still exceeds the average in the mining industry. The lower end of the range of expert estimates made by good neutral professionals whom I do not understand enough to try to coerce even if I wanted to is in excess of the average of the industry. If I plucked a single figure out of the air, it would be meaningless, but the average return for the industry is known and the lowest of the estimates of the return is in excess of that.

Who prepared the estimated yields?

I put it on the record of the House a little while ago. This is interruption to try to disrupt my reply which the Deputy does not want to hear.

We want to get the facts.

The next point, that no capitalisation plan exists, is untrue.

Where is it?

A capitalisation plan has been submitted to my Department. It exists and we have received it.

When was it submitted?

We cannot have a debate with questioning of this kind. The Minister should be allowed to continue without interruption.

The next point, that no proposal for river diversion is before the planning authority—the tenth point—is true. The first point was true but from two through nine were untrue. Two out of ten were true.

Two through nine were true.

The Minister will have to call another press conference soon.

About the last point I should like to say that when we negotiated with the two companies we obtained an agreement from both— Deputy Crinion spoke about this and it is well that I settle it—to divert the river when I decide it is essential for the development of the orebody and that the cost be split between the two mining companies. That agreement exists because as I said in my opening speech that were the river to remain in place it would sterilise this sloping pillar to hold up the river of ore estimated at a value of, I think, the figure I gave—it is in my text—of £200 million. That agreement has been negotiated and exists. We have had the London School of Mining do a careful study of this. It is perfectly right to raise it and I can assure the House that it has been properly approached and that we have negotiated a solution to it.

Point No. 11 was that no precise, workable——

What will it cost to divert the river?

——no precise workable ore reserve figure is available.

For 17 million American dollars last year——

Will the Deputy please allow the Minister to continue?

The minable ore reserves have been calculated by leading international consultants on behalf of Bula and the Department and they agree within acceptable limits. So, the statement that no precise, workable ore reserve figure is available is untrue.

That no provision has been made for capital additions of cost during production—this is not true. I am assured by the people I consulted since the allegation was made, that it is not true and that they have done that.

What was the provision?

This is becoming farcical.

I am afraid it is.

The Minister should be allowed to make his speech without interruption.

If the Minister would give some information, this would not arise.

There are other Stages of the Bill on which Deputies can elicit further information.

That no allowance can be quantified for possible lowering of the ore mining grade which might be affected significantly particularly if the river diversion is delayed or not undertaken. I am assured on good professional advice that it is possible. Deputy O'Malley says it is not, but I am assured that it is and I would refer him to the London School of Mining study which we have had carried out in this respect.

I would be glad to refer to it if the Minister would send me a copy. Would he send me a copy?

That relates to river diversion. The extraordinary arbitration valuation which comes to about £40 million for the mine and which is to be compared with the reported value of £7.75 million placed on the entire undertaking by the Minister's own financial advisers must have been based on very high recovery figures provided by Bula which may not be justified, particularly for the lower grade of ore to be mined—I am sorry to go on so long but that is accusation No. 20. I have said, but let me repeat that the brief to our advisers was that we wanted a negotiating figure and if those advisers had come up with what was settled for, we would be very cross, indeed, with the ultimate arbitration figure. This is a process like buying or selling a horse. We asked for a negotiating figure and, therefore, they took the most pessimistic estimate of the various variables and that is what they came up with. Of course, they did. Their procedures were correct, were scrutinised by the arbitrators, were internationally accepted and were valid procedures. But there are two things: the techniques by which you value a mine and the assumptions on which you do it, on the techniques internationally accepted, well-known, used by us, analysed, scrutinised, probed by the arbitrator and accepted and the assumptions which you plead into that process.

So they gave a false figure.

They certainly did not give a false figure. Again, that is a sort of bogus effort to cheat and twist. Everybody except Deputy O'Malley understands perfectly well what they did. Their brief was to give us a negotiating figure and they did it. This scheme, the concentration, cost estimates could be inaccurate if extensive pilot plant work had not been undertaken. Deputy O'Malley says this work was not undertaken, that facilities do not exist. The Department is in possession of results of pilot plant work carried out. We are in that fortunate position.

That is a different question. The Deputy made a clear affirmation of something which turns out not to be true. He does not even try to defend it but he tries to wriggle and asks: "By whom". That question is an acceptance that his point No. 15 when he read on to the record of the House lightheartedly was not true.

No, it is not. No work has been done on Bula. You are only trying to use Tara figures.

Order. We cannot have a Committee Stage debate or cross-questioning of this kind at this stage. The Minister must be allowed to make his speech without interruption.

Nos. 16 and 17 go together and they say that it is not possible to quantify the effects of all these deficiencies for a projected cash flow and, therefore, the resulting value of the project is not possible to quantify. There is point 17 which is really the same point in which he says: "I do not think they can be quantified in the discounting factors used for valuation purposes". Deputies may or may not think it but the fact is that this is a common practice and it is a common practice by experts in the industry. One can say that if it were not a common practice it would be very hard to get many of the mines not in Ireland but in the world off the ground.

In point No. 18 it is stated that the Minister and the arbitrator have relied upon reports by Bechtel for Bula and submitted to the Minister and the arbitrators. Then he asks: "Was there a full report or was it just four or five pages from some open-cast expert commenting on someone else's report"? First there was a Bechtel report, one of the great companies of the world in this area with a professional reputation much too important for it to give distorted results to anybody. People in that category must give honest reports or they do not stay in business. Their size in relation to Bula is such that Bula could in no way—if they wanted to, which they did not—influence them in any way. First, it is a good report from a company of very high standing. Secondly, it was not four or five pages. We had a number of responses from a range of experts which I am told is more than one volume.

It was said that we cannot obtain confirmation or evidence of the Bula report prepared for them by Bechtel in regard to reservations and operating costs. The arbitrators were made fully aware of any such reservations and it is fair that I should record that. It was suggested that no acceptable investment analysis as applied to equity investment in mining projects is possible, etc. That is great stuff but mining companies do make investment on the basis of the best information available. It is continually happening even outside mining, happening throughout the whole of industry and commerce, with much less expert back-up, with much softer information than we have, much less precise information in regard to accuracy and quality and quantity than was available to the board of arbitrators. Deputies may believe me or not but I assure them that both in regard to mining and industry that is normal practice.

I have dealt with Deputy O'Malley's 20 points. I am sorry it took so long but I was diverted and I was interrupted. It was only fair that when accusations were made I should try to answer them. I think that ends what I would call part one of the speech I have to make, with one or two small exceptions. Deputy Lalor this morning quoted me, giving a Dáil reference which I shall not repeat, saying that about 80 per cent of the minerals in Ireland were State owned. He quoted me as saying this in the Dáil on that day and it is a correct quotation.

He quoted me yesterday as saying that 40 per cent were clearly State owned and that you could probably make good title for another 25 per cent, making a total of 65 per cent and because of the difference in those figures, one given in 1974 and one given now, he questioned my veracity in regard to those figures and, indeed, generalised it to say that in general I was not to be believed. He can make what innuendos he likes, of course. That is his business. The clear position is this: I do not research those things and the number of people there who have been Ministers know that I am telling the practice like it is, that on a question like that I do not go into these papers myself. I am not a lawyer. I would not know where to find them and would not understand them if I went into them.

I give an opinion and very often, if I have not looked up the full quotations I put in a word like "estimate" or "belief" or "is probably" or what not, because I know they are estimates. The estimate given by decent people, not trying to skew the evidence, in 1974 was 80 per cent and that is on the record and the estimate given since there have been a number of court cases and things like that and a lot of scrutiny of the whole area and a lot of thought about it, now, a couple of years later, is 40 per cent clear and 25 per cent problematical, a total of 65 per cent, with 35 per cent privately owned. That is a bigger private sector, unfortunately, I say with regret, but that is a decent estimate made by professionals in the same way who have not gone into the whole thing. It is theirs. It is not mine. I passed it on in good faith as I received it. I do not think it makes them dishonest for making it. I do not think it makes me dishonest for passing it on.

I am sorry that the estimate has varied and particularly sorry that it has varied as it has because the private sector is now 35 per cent instead of 20 per cent as I thought it was. It was a mistake in good faith. If the Dáil feels that I have misled it and that my veracity is in question, I apologise to the Dáil. I did not intend to mislead it and neither did the people who prepared it and whose words I passed on in good faith.

It is not very encouraging in relation to the other estimates.

The Deputy may travel that for what it is worth and good luck to him. I want to come to the second part of the speech, which relates in fact to the strategy of the Opposition and to what happened and to whether the delays and mistakes could have been avoided and most importantly of all, whether when it came to my turn to make decisions I did the correct thing or whether I should have done totally opposite, which is what the Opposition suggested, which is, that I should have made another order as soon as I got the High Court decision and should have persisted on that path.

I want to make the point to anyone who will listen to me seriously in any sort of neutral way that that path was fraught with the most terrible difficulties because it turned out that the law was bad under which we were working and which had been operated quite successfully early on, before there was big money and, therefore, before there was High Court and Supreme Court challenge. When the High Court and Supreme Court challenge came it turned out to be very bad law and the rectifying of it turned out to be extremely difficult, first because—no criticism about their decisions—there were decisions from the High Court and the Supreme Court that did not resolve our constitutional uncertainties and anybody fair in the legal profession will know that there are very great difficulties about the law itself and very great difficulties about correcting it because of the constitutional aspects of any effort to correct it by another piece of legislation and anybody fair will accept that that is a reasonable presentation of the facts of the matter.

Could I ask the Minister were there any court cases challenging the constitutionality of the Act?

Not so far as I am aware.

I do not think there were.

But there were both submissions of opinion and subsequent opinion submitted in judgments which raised those questions, obviously, or I would not be raising them because these are not areas that I know about, but there were very severe questions of the kind that I will indicate.

Since it has been said today that I made the mess and it is my fault, let me give the chronology and let me see what happened them. The orebody was discovered towards the end of 1970. Can I say this about it?—the people who definitively made that discovery were, indeed, the Tara people but there were a few pointers in other places. There was an analysis of animal health in the area from the levels of poisoning by heavy metals which I knew about as a veterinarian because there were very interesting results as to why there were these diseases in the stock. There were very interesting results from analysis of water in streams done by another agency for other people. There were interesting results from herbage analysis. Rio Tinto Zinc—it is hard to put it on the record but it is true—had prospecting rights on that area, did not find the orebody and surrendered them. So, lots of people had the instinct, yes, that is very exciting, that there was something there. Good luck to the people who found it. They have a lease over the State part of it now and they are coming into production this year and the State is in partnership with them. I wish them profit, long life and health and success, no regrets about it. They were not alone in that discovery. That was in the end but they nailed it down clear and got bore holes and got assay figures and they were the people on the spot at the crucial time, whatever pointers there were of the sort of sniffing the air that good prospectors have. They were the guys that got it. That is the truth of the matter.

In March, 1971, Bula announced the purchase of the Wright farm and in March, 1971, remember, there was the acquisition order of my predecessor. When I say "predecessor" I am not thumping an individual. I am not worried about Paddy Lalor. I am not trying to make him an idiot. I am talking about what Governments did collectively. I am not in the business of going at individuals or individuals' characters. Could I say in parenthesis that I do not suppose there is anybody in this House who does not know people in both companies and possibly does not have relatives in both companies or in one or other company? Deputy O'Malley was cross about this yesterday. I have made and I will make severe charges against Deputy O'Malley. They will be of a political kind. I am not in that business. I never made these imputations. I never suggested that in this matter anybody's opinion was changed at any level by who their brothers or brothers-in-law or anybody else happened to be or what company they happened to work for. It is more serious than that. If we have profound differences, as we do, they are about serious things and not about that sort of political muck.

May we take it that the Minister's reference last week was made in the heat of the moment?

What reference?

The reference to Deputy O'Malley.

No, Sir. That was not made in the heat of the moment but was very careful, contained no such imputation and I have amplified what I said in my opening speech, and Deputy O'Malley made reference to my amplification in the beginning of his speech, that I did not make such an imputation against Deputy O'Malley and when I talk about shadowy multinationals I am not, and I repeat, talking about either of the Taras, either the Canadian parent or the Irish subsidiary. I am talking about the people behind them, distant people, who are much more difficult to identify and to control.

The acquisition order was announced. The process of getting that orebody into production was announced in March, 1971, with the acquisition order. In April, 1971, there was an undertaking given, under some duress I think, and I know not too happily, by the previous Government —they gave it nonetheless—an undertaking to Tara to grant a mining lease. The ores were found in 1970. In February, 1972, quite predictably, there was a case in the High Court for mineral ownership. We are that much down the road. We were still in Opposition. May I say for myself, and I am not revealing anything, I had not the faintest thought that 12 months later, from March, 1972, I would have this on my lap? In July, 1972, the hearing in the High Court finished. There was a reserved judgment. I was in office then and if you get a reserved judgment you wait until you see it. I did not get to this question by April, 1973. In April, 1973, judgment came down and Bula won. Then there was an appeal by me on advice precisely because none of the very worrying issues was resolved by that judgment. We thought there was a chance that by going to the Supreme Court we would get, as only they could resolve it, the basic legal issues resolved so that we would know where we stood. The balance of advice to me was to go to the Supreme Court and try to get clarification.

May I interrupt the Minister? This is crucial at this point. Is it not true that the case was decided by the High Court on a technicality because the order referred to minerals, gravel and sand——

Yes, that is true. The order was imperfect.

——and that the constitutional issues at which the Minister is hinting at the moment were not raised in that case?

In the judgment they were not resolved.

They were not raised at all.

I cannot say if they were raised in the High Court——

I can assure the Minister they were not.

——but I will accept the Deputy's word. Then there was the question of the Supreme Court. They upheld the High Court decision. By then we had reached March, 1974, in a process I did not initiate and which all my advice was that I should allow go to its completion in the Supreme Court, and I regret it as much as everybody else that all that time was lost. My only change of policy, instead of making another High Court order immediately to try to perfect it, was to go on to the Supreme Court to see if the legal position would be clarified there. I will come back to that point in a minute because it is important.

In July, 1974, three and a half months after I got the Supreme Court decision, I had an agreement with Bula which enabled the process to take place which will open the mine. It took me longer to get the agreement I wanted from Tara. Let me make my strategy completely clear. I wanted a shareholding in both companies for the sake of the knowledge, participation, expertise and the profit, but with the undertaking that Tara had got under duress, and with other technical difficulties because their orebody was very messy and was not totally State-owned; there were private currants in that cake, I could not have got my free 25 per cent.

The Opposition said they did not want it and that we should not be looking for it. They might have thought if they stuck out there would be a change of government and the old plan would be put into operation after all. If I had not had the free Bula 25 per cent, I would never have got the free Tara 25 per cent. If I had not been willing to buy 24 per cent of Bula, I would not have got the free 25 per cent. What did the expenditure we are now discussing unlock? It unlocked 24 per cent of Tara. We have been doing elaborate exercises considering whether that 24 per cent alone was profitable. The arbitrators are experts and gave a figure which was a little more than I wanted, but it is not unreasonable. We have been conducting this debate as if it were on that 24 per cent, but that got me another 25 per cent. In other words, my purchase price of 24 per cent got me 49 per cent of Bula. That free 25 per cent got me 25 per cent of Tara which I could not have got otherwise. Look at the sequence in time which I spelled out. Without that, I could not have got what I now possess which is 30 per cent of one of the richest lead and zinc ore bodies in the world. That is what it unlocked for me. That is obvious surely. Do I have to say it?

It is not. The Minister had a card in his hands which he has just discarded. He had the card in his hand of making a proper order——

I have had a lot of interruptions and while I am happy with reasonable interruptions, I do not want contributions. Deputies had their chance to speak.

I have given that chronology and explained the basic strategy. Now let me turn to what I was urged to do today by Deputy Lalor who was the man responsible at that time. He said: the minute you got your High Court decision in April, 1973, why did you not perfect the order? In other words, he was saying his policy was correct although up to then, it had produced delays from October, 1970, to April, 1973. Yet he asked why did I not perfect the order. Here is the point. This is not for me to decide; this is for expert lawyers. I did not take that decision alone. I got very good advice.

Had I gone ahead then to make a new order, do Deputies believe that it would not have gone to the High Court again? Of course it would. The case was brought to the High Court in February, 1972 and we got the judgment in April, 1973. It had taken 14 months. If I had made the order again, I am not prejudging whether it would stand up or not, I am simply saying that there we were going to the High Court and waiting another 14 months——

Not necessarily.

Let us halve it and say it would only have been seven months. My guess that it would be as long again is as good as the Deputy's that it would be shorter. If the Deputy likes, I will concede that it would be shorter. Having gone through the High Court in seven months, do you think that would have settled it with issues like this at stake? Would we not head straight for the Supreme Court again. Of course, we would.

They would be waiting for another general election.

Then I would have all the pressures of saying: "There is an orebody. Men have been taken on and a shaft has been sunk without a lease". The pressures are there to get them to work. That was the ploy; that the pressure to give the release on any terms would be irresistible to carry out the undertaking. Remember Tara sued me to carry out that undertaking which had been given under duress by my predecessor. So I am playing their scenario, but nobody from the Opposition did this today.

Let us say that in the Supreme Court the new order is perfect and stands up. Then you put into operation the procedures of the 1940 Act under which we are going ahead, which is that after the Minerals Acquisition Order has been completed, you proceed to evaluation of what has been acquired by the State? Do you think that would have gone smoothly? Of course, we would have ended in the Supreme Court.

That would not interfere with production and in the meantime a lease could be——

The Deputy is quite right. It would not interfere with the production and, believe me, I will come to that later.

You said it should not start without planning.

I want to get on with this because it is interesting and I do not want interruptions from either side. Then we proceed to the Supreme Court. I have been told by neutral expert lawyers that there was more than an even money chance that the compensation, as in the past when the Act worked and small valuations were given, would have to be on appeal to the Supreme Court with legal arguments I do not profess to have mastered, and would have been at the full commercial value of the orebody of the privately owned business. There is a lovely situation. There is catch 22. I would not be paying for the value of 24 per cent; I would be paying for 100 per cent.

Let us take it that we have an even money chance. If the Supreme Court say: "Full commercial value for 100 per cent", then I pay 100 per cent to private owners who have done very well out of this. But then I would be doing it just for the privilege of perfecting the State's title in order to attach the private bit on to the public bit. Then I could try to recover that which I had expended on the State's behalf from the lessees. Of course, if I recovered it all the State would get nothing from the private bit and, if I could not recover it all, the State would be at a loss. It is perfectly possible they would say to me, at that price, since it was valued at the full commercial value by the Supreme Court, that they did not want it and then I would have been buying at 100 per cent commercial valuation and not getting any shareholding rather than buying 24 per cent at a commercial valuation and getting 49 per cent.

If you own 100 per cent you own it. It is not a question of taking a shareholding. You own it and you can do what you like with it then.

Sure, but look what you pay for it.

Is the Minister saying he is against the State acquiring rights?

No and, from the Deputy's interruptions, I think he did not hear my speech yesterday.

I did actually but I am dealing with the particular point.

All right, but I am very much further. Here is the point. The part that I was urged to pursue was fraught with great uncertainty and delay. Delay! What we had was nothing to the delay that might have ensued with the possibility at the end of it of the State buying 100 per cent at the commercial valuation in order to possess simply the title. Really I am not trying to make a political football of this. I will come back to that later. That was not a prudent course. Then the Opposition say: "OK. Then it is something else", but they do not discuss the something else because they said it was a prudent course. Endless delay!

What does the Minister mean by endless delay? Would he quantify that?

Impossible to quantify it because of a series of appeals to the court.

The Minister has been there now for almost four years and nothing has happened.

The amount of compensation would not hold up production.

Order. The Minister, without interruption.

It has not been necessary to hold up production. The way I read it it has got a very great deal of work done on the larger part, on 80 per cent of it, and I will soon get work done with any normal spectrum, not taking a very optimistic and not taking a very pessimistic view but taking it in the middle, taking the normal spectrum, will get the other bit, so I am doing it quicker and more cheaply.

I was bitterly reproached because I said this was not a good solution. I did not like it. It was not perfect. We have reached a damn silly state in debate if Members are expected to say that everything they bring to the House is perfect. Everything is not perfect. I do not like it, no. It is not perfect. I wish the 1940 Act had been good. I wish all the minerals were clearly vested in the State. I wish one could be certain of obtaining those that are private under the old-fashioned style of compensation which compensated owners before they were evaluated. I wish all those things.

But that was not the situation and no one offered me a better alternative and I took steps. Let me sum up what this did because I ended up with 30 per cent of the ore mine and I ended up with that 30 per cent of the whole ore mine. I did that at an expenditure of £9.5 million and I cannot quantify any more than Deputy O'Malley can the amount of clawback through taxes but there are three tax headings which are relevant introduced by this Government. Deputy O'Malley with his usual lack of respect for what is verifiable says "No tax".

I see the position as the following: the people who are recipients will do their utmost to evade it and the Revenue Commissioners will collect as much as they can. There will be a trade-off between them. I cannot say with certainty how much. That will be between the recipients and the Revenue Commissioners. To assert blandly, as Deputy O'Malley did, and this is what is so frightening about any sort of truth telling in debate, and to assert without qualification "No tax" is simply silly. I believe there will be tax and I believe it will be substantial and I believe it is right to count that as a clawback from the total amount of State expenditure and, indeed, the amount you are then left with in millions of pounds is the amount I expend month after month through the IDA to individual companies with no shareholding, no participation, no tax on exports, but just to create jobs. I spend that much money and I do it with the approval of the Government and it never comes here before the Dáil and, if any Member asks a question, I say it is tradition to wait for the annual report. When, however, I expend a comparable amount of money to get in the end onethird of the richest zinc-lead orebody in the world I am told I am profligate and I am an idiot and codded up to my eyeballs. That is enough.

The Minister is not, I hope, leaving the tax question at that. He said he would specify the three headings under which tax would be payable. I think he said that.

I said there were three Acts under which tax could be collected.

Will the Minister say a little more as to how he will apply those Acts in this situation because that is what the argument is about?

I am careful in the use of words. I said it is the job of the Revenue Commissioners. I said one side would get good accountants to defend themselves as well as they could and the Revenue Commissioners would do as well as they could and I am not pre-judging the outcome. I say there are three Acts under which the State can endeavour to recover and clawback something for the State.

Would the Minister name the Acts?

Wealth, Capital Gains and Capital Acquisitions. I have been saying what is the scenario in time. How did it evolve? What were the choices before me? I was saying I was faced with very real difficulties and I was mocked for saying I did not think this was a real solution, a perfect solution, and I am sorry about that. I could play politics and say it is perfect. But it is not. It is messy. I am doing my utmost but those who have been Ministers will know that the Department of Finance, the Attorney General and the parliamentary draftsman and others are involved in getting a Bill. It is really frightening. It is backwards and forwards and I have done my utmost to get it quickly. I am told how long it has been, but I got the judgment of the Supreme Court in March, 1974, not quite three years ago. I would hope to have a Bill in three years but I may not succeed. Any reasonable member knows the difficulties. That was moving not myself but them as fast as I could immediately it became evident how bad the legislation was and that we needed new legislation. Can we not all agree that we do? Can we not all agree that it is very difficult because of the constitutional aspect? Can we not all agree, those who have experience of bringing Bills to this House, that that sort of time lapse is not unreasonable with those difficulties and constraints? Can we not all agree it is not the responsibility of one individual Minister but of the whole machine in operation, parts of which he can influence and parts of which he cannot in regard to the rate of work?

I have offered the history of what happened. I have offered the choices and I have indicated to reasonable people the path I took was the best way out of a very difficult situation which produced a very good result for the Irish people in terms of a return of 75 per cent on one and 62½ per cent on the other and the whole expenditure in terms of that vast orebody for 45 per cent of one and 25 per cent of the other is £9.5 million with clawback. That is profligate and foolish. What have we reached in terms of dottiness and in terms of political opposition for the sake of opposition? I cannot quantify the clawback. Any sensible person, anybody who is not trying to make mischief in an election year, would know that was a wonderfully good deal for the Irish people and was rectifying a position that had gone by default.

I suppose the Minister means that seriously.

That leads me to the third part of my speech which is to analyse the thrust of politics between the two sides of this House, to say what fundamentally each side is and to say then which side policy thrust I believe to be in the interests of the people because we have been having an auction yesterday and today and protesting our commitment to the interests of the people and the greatest possible return for them. I do not suppose there was a speech on either side that did not contain that phrase. But nobody wanted to look at the figures. I said in my opening speech that for the private minerals under the regime that Deputy O'Malley keeps saying we ought to continue to operate, the return to the State from the private minerals now known to be 40 per cent of all in the land would have been zero, nothing, nought; and no royalties because it is private, no tax because you do not believe in it, because you have abolished it, no participation because that is wicked, so there is nothing from the 40 per cent. That is one bit. The other is royalties only which from the 25 million tons taken out in the 11 years until I came along yielded £2.8 million to the State and when we bleed for the public money going out—and I am as careful of it as anybody—would we not bleed for the money that did not come in, for the investments that were not made in the telephone system or the roads? Is money foregone by the State 20, 30, 50 times less to be counted than money spent by the State? Is the passing up of revenue unimportant? No answer.

If the Minister is looking for an answer——

The Deputy came in when Deputy O'Malley left for the purpose of interrupting and disturbing my train of thought.

Is the Minister asking me to reply or is he not?

I have had a great deal of interruption. I invoke the protection of the Chair.

Did the Minister not say "No answer", having put the question or am I misrepresenting him?

The Deputy is deliberately misrepresenting me because I referred to the debate and the record will make that clear.

As long as it is clear.

It is clear to both of us. It is a waste of time, it was a nice little ploy.

(Interruptions.)

Now let me come to the third part of my speech. The first part I spent on the valuation, on the accusations, on Deputy O'Malley's 20 points, two of which turned out to be true. The second part I spent on what had happened, on the chronology of events and of policy alternatives none of which was discussed in the debate. I introduced it in my opening speech.

Deputy Lalor discussed it.

He did discuss it.

I want to analyse the fundamental thrust of the policy of the Opposition when they were in Government and when they were in opposition. To do that I refer to something I said at the beginning. Deputy O'Malley minimises as two or five or ten per cent the shareholdings in the various companies. I mentioned at the beginning the shareholdings in Tara by some of the great international companies and I said that Charter Consolidated and Comicon banded together owned practically half, not the little interlocking shareholdings that Deputy O'Malley referred to, and I put his quote onto the record. The policy of the Opposition was to deliver the whole orebody to those people. When you look at the share register of Tara Exploration and Development you see that those people are nominees so there are lots of others whom you cannot identify. The Opposition policy was to deliver it to them totally, and, therefore, to deliver the total control, not only over the physical orebody but also over what became of it and over the smelting, the marketing and the whole future of our natural resources in regard to lead and zinc. What did they do? They made an order against some internal advice in the Department to possess for the State, compensated by the State, the private bit.

Mr. Wright was very lucky. He was an old man and a farmer and he had lived there all his life and he had certain rights. He was not a runner-in; he was resident and it was his land. Tara came to him and tried to buy it out. He is dead and we will never know what transpired between them but it ended up that they knew already that he was sitting on something immensely valuable, worth many millions of pounds. It could have been solved then if they had not made him a derisory offer because they could have bought it and amalgamated with the public bit. The State did not give its undertaking then but gave it a few months later in April, 1971 and the whole could have been unified and developed as a single ore-body.

Tara had it with the people I have mentioned at the back of them. There are Irish people among them and they are perfectly reasonable people and I hope to go on working with them for a long time. Except for the State's bit, Tara Mines is a wholly-owned subsidiary of a Canadian company registered in Toronto. I have mentioned some of the shareholders and there are plenty more nominees on the share register. The effort was to deliver the whole thing to the controlling shareholders of Tara Exploration Development and the bit that by accident belonged to a local farmer, and that he did not choose to part with for a fraction of what the intending purchasers knew it was worth they were going to acquire by a compulsory purchase mechanism under a minerals acquisition order, not for the State but for the purpose of transferring it to people who were already some of the most powerful people and the hardest to identify in the whole of the mining world. We know enough about them to know approximately who they are. I am glad Deputy O'Malley has come back because I am going to turn to something else but that was the thrust of the strategy. Give them the orebody in toto.

The Minister means give them a lease. Is that what the Minister means?

As he did.

Yes, but use public money so there is no competitor. I am going to reiterate facts but not comment because I leave comment to others. I want to put on record my awareness of certain facts that Deputy O'Malley uttered yesterday because he was Minister for Justice in that Government and he knew about the undertaking. Presumably he was a participant in that decision in April, 1971 and he knew about the acquisition order and about the Government discussions behind it and he knew the effort was to use the whole weight of the State to push through an order and if it did not stand up the first time to go on pushing it through and so harass the people who at least are Irish, who have at least shown remarkable entrepreneurial flair, have created a very large number of jobs, have shown great management skill and production skill in Ireland, not to get the minerals for us for our development but to deliver them to the people I have already mentioned.

What does the Minister mean by "delivering them"? Does he mean give them a lease?

I refer to something Deputy O'Malley said yesterday and, perhaps, he did not realise what he was saying. He said that as a member of the Government who had taken the decision in 1971 to make the acquisition order and who had given the undertaking in April, 1971 to give a lease to Tara, in the autumn of 1972 as a Minister he bought 100 shares in Tara. I will not comment, I have put it on the record again.

What is the purpose of that intervention, since the Minister was disowning all that kind of thing a while ago with a holier than thou attitude?

I have asked for the protection of the Chair before. I have had much interruption during this speech.

Acting Chairman

Can the Minister conclude his speech without interruption?

On a point of order, is it in order for a Member of this House, Minister or otherwise, to make an insinuation of the kind made by the Minister for Industry and Commerce just now in regard to Deputy O'Malley? Would it be in order for me to refer to the connections of two of the Minister's colleagues with Tara Mines and to inquire what their purchases of shares had been?

Acting Chairman

As I understand it, it is not for the Chair to intervene when the Minister is replying, or to judge any of his statements——

The Minister might live up to what he was preaching earlier if he wants to keep the debate at that level.

Acting Chairman

As I understand it, the Minister was referring to some statement that had already been made in the House. The Minister now please, without interruption.

The thrust of the policy of the Opposition, from the beginning, was that a single lease should be given to Tara, and that the only return that we would obtain was by way of a royalty. They have gone on disapproving of shareholding and of taxation even in this debate. National interest lies in having more than one grouping, particularly in having an Irish end as well as a very distant end that we find difficulty in identifying. We need the great international companies with great expertise, but we need to deal from a position of strength and to keep them at a distance so as not to be eaten alive by them. If it is decided to give them one of the greatest natural resources we are ever likely to find, and if the policy of neither taxing nor participating, but of having a royalty is persisted in the most that can be got from any royalty is a tiny return.

The royalty can be fixed at whatever percentage one wants.

That is a formula for ripping off the Irish people not just in the physical sense of the mine, but in the financial sense as well. That is a formula for people who parade their concern for the maximum advantage to minimise the advantage for Ireland. That is a formula for delivering us to people who we can hardly identify and who we know have a very tough record internationally.

That seems to be diametrically opposed to the interests of the Irish people and it seems to forego hundreds of millions of pounds of revenue. While we have to deal with them and are glad to deal with them, we must do so with great circumspection and with as much protection as we can get.

With a royalty of what rate?

Any rate that could be imposed and operated could not deliver the same sort of return as is delivered by the combination of participation, taxation, and royalty together.

If the Minister wants to be taken seriously he should do his sums and tell us the result.

(Interruptions.)

The reality of those who bleed for the Irish people is that they are willing to forego huge amounts of revenue. The policy of those who bleed for the defence of national resources is to hand them over to people who can hardly be identified. I am glad to say that this Government got into office in time to operate a policy of mutual and hopefully fruitful and equal co-operation, but not domination with those great companies. If we persisted in the policy of our predecessors the return would be 1/150th part of what it will be under the regime with which I am proud to be associated. The choice was republican words and a totally supine posture in regard to State income and State influence on the Opposition side, and on the Government side a posture of a mixed economy of State participation, of having the knowledge, the power and the directors to understand the ploys, develop the expertise and keep these people at bay. We need them, yet we need to control them.

I am very proud to recommend to this Dáil a Bill which spends £9½ million to obtain 30 per cent of one of the greatest orebodies in the world. We are extremely lucky in terms of long term national interest that a change of Government took place when it did, before the policy of our predecessors was irrevocably stamped on that orebody, and that we had a chance to get a reasonable balance, a good take for the State, and a reasonable return for Irish entrepreneurs and for the people from overseas, whom I fear, but whom we need. I am for a balance of equal power between them and us. I believe we have got that, and that is good for the Irish people.

In the presentation of this there is a psychological difficulty, because the alienation from the State via a lease to Tara of ore worth thousands of millions of pounds, and the foregoing of those huge revenues in the past and the promise to forego them in the future is money that the State never sees so it is not a big issue. When £9.5 million gathered from the Irish taxpayer goes out to give a capital gain to a small number of people, everybody bleeds. That is an aspect of it which I do not like, but I have never said that this is a perfect solution. When revenue is foregone and assets alienated it is not a big issue, but revenue given is another thing altogether. In terms of balance of national interest, in terms of the value of this deal to the people, in terms of recovering a position where we have directors, not two out of seven as has been stated but two out of ten——

It does not make much difference.

It is just another inaccuracy, another bizarre piece of lack of respect for the truth. When they are corrected, the Opposition say that it does not make much difference.

The presentation of what I have done, because I have not pretended it is perfect, is difficult, but any reasonable arithmetic indicates that this is a very good deal. I will be judged by it down the years. Deputy O'Malley can make any estimate he likes, I can make any estimate I like, and my experts can make any estimate they like, but in the end, the movement of metal prices, the movement of exchange rates, the movement of labour costs may validate or falsify any one of our estimates.

I am proud to be judged by this deed. It is in the womb of time whether it is good or bad and it is in the womb of time that this one is associated with me. I will live with it and I will be proud to do so. I will be proud to be part of this Government that brought this Bill to the Dáil. It is a great piece of good fortune that we were able to attain a position where we got a shareholding, where we got taxation as well as royalties and where we were able to deal with the great international companies, which we need, in a position of equality not from a position of servitude, not from a position where they can rip us off. I commend this Bill to the House and ask that it be given a Second Reading.

May I ask a question? When the Minister got the decision in 1973 from the Supreme Court, and having learned of the difficulties that he would be facing with a new order, did he at any time consider recommending to the Government that the Constitution be changed to deal with this matter?

I have not recommended that course to the Government. Of course, the question of change has arisen in the experts' efforts to draft remedying legislation. If we ran into the stone wall and if in the experts' opinion it was not possible with our present Constitution to remedy the legislation and if we were faced with the circumstances where we might have to buy out all the 40 per cent ore in the country at current commercial value then, of course, I would have to go to the Government to recommend a change in the Constitution to enable us to obtain the rights of the Irish people to their minerals, which I believe to be the intention of the Constitution to uphold. I have not been advised by the expert drafters that that is the only road to go and, therefore, I have not done it. I do not rule it out. If that is the only road to go I would certainly go it. I expect to get an answer fairly soon as to whether it is the only way out of the difficulty.

Would the Minister not agree, in retrospect, that it would be the faster and the final way of dealing with the problem?

Certainly a final way out, with great regret, not faster. My purpose was to solve both things simultaneously, that we get on with the ore-body and get the men working on the one hand and that we try to solve the thing in parallel. Why does one have to choose one road or the other? I did not. I tried to go both roads and I believe I am a long way along both roads. You do not choose one path or the other. You try to solve it both ways simultaneously.

Could the Minister direct the attention of the House to any precedent of any Act passed by the House referring to an agreement, in the way this Bill does, where the agreement was not produced?

I cannot do that at this moment. It may be an appropriate point to raise when we come to the next Stage of the Bill. I will endeavour to furnish an answer then. I cannot do it at this moment.

Does the Minister appreciate that in view of the very heated argument which there was on this point that it would be appropriate that he would at this stage be in a position to refer to such a precedent if it existed? If it does not exist does it not invalidate the whole argument he was making? What is he covering up?

The position is as I have stated. This is a point which can be dealt with later on in the proceedings of the House.

There is no precedent.

Question put.
The Dáil divided: Tá, 66; Níl, 59.

  • Barry, Peter.
  • Barry, Richard.
  • Begley, Michael.
  • Belton, Luke.
  • Belton, Paddy.
  • Bermingham, Joseph.
  • Bruton, John.
  • Burke, Liam.
  • Byrne, Hugh.
  • Clinton, Mark A.
  • Cluskey, Frank.
  • Collins, Edward.
  • Conlan, John F.
  • Coogan, Fintan.
  • Cooney, Patrick M.
  • Corish, Brendan.
  • Cosgrave, Liam.
  • Costello, Declan.
  • Coughlan, Stephen.
  • Creed, Donal.
  • Crotty, Kieran.
  • Cruise-O'Brien, Conor.
  • Desmond, Barry.
  • Desmond, Eileen.
  • Dockrell, Henry P.
  • Dockrell, Maurice.
  • Donegan, Patrick S.
  • Donnellan, John.
  • Dunne, Thomas.
  • Enright, Thomas.
  • Esmonde, John G.
  • Finn, Martin.
  • FitzGerald, Garret.
  • Fitzpatrick, Tom (Cavan).
  • Flanagan, Oliver J.
  • Gilhawley, Eugene.
  • Governey, Desmond.
  • Griffin, Brendan.
  • Halligan, Brendan.
  • Harte, Patrick D.
  • Hegarty, Patrick.
  • Hogan, O'Higgins, Brigid.
  • Keating, Justin.
  • Kelly, John.
  • Kenny, Enda.
  • L'Estrange, Gerald.
  • Lynch, Gerald.
  • McLaughlin, Joseph.
  • McMohan, Larry.
  • Malone, Patrick.
  • Murphy, Michael P.
  • O'Brien, Fergus.
  • O'Connell, John.
  • O'Donnell, Tom.
  • O'Leary, Michael.
  • Pattison, Seamus.
  • Reynolds, Patrick J.
  • Ryan, John J.
  • Ryan, Richie.
  • Spring, Dan.
  • Staunton, Myles.
  • Taylor, Frank.
  • Timmins, Godfrey.
  • Toal, Brendan.
  • Tully, James.
  • White, James.

Níl

  • Allen, Lorcan.
  • Andrews, David.
  • Barrett, Sylvester.
  • Brady, Philip A.
  • Brugha, Ruairí.
  • Callanan, John.
  • Calleary, Seán.
  • Carter, Frank.
  • Colley, George.
  • Collins, Gerald.
  • Crinion, Brendan.
  • Cronin, Jerry.
  • Crowley, Flor.
  • Daly, Brendan.
  • Davern, Noel.
  • de Valera, Vivion.
  • Dowling, Joe.
  • Fahey, Jackie.
  • Farrell, Joseph.
  • Faulkner, Pádraig.
  • Fitzgerald, Gene.
  • Fitzpatrick, Tom (Dublin Central).
  • French, Seán.
  • Gallagher, Denis.
  • Geoghegan-Quinn, Máire.
  • Gibbons, Hugh.
  • Gibbons, James.
  • Gogan, Richard P.
  • Healy, Augustine A.
  • Herbert, Michael.
  • Brennan, Joseph.
  • Briscoe, Ben.
  • Brosnan, Seán.
  • Browne, Seán.
  • Hussey, Thomas.
  • Kenneally, William.
  • Kitt, Michael P.
  • Lalor, Patrick J.
  • Leonard, James.
  • Loughnane, William.
  • Lynch, Celia.
  • McEllistrim, Thomas.
  • MacSharry, Ray.
  • Meaney, Tom.
  • Molloy, Robert.
  • Moore, Seán.
  • Murphy, Ciarán.
  • Nolan, Thomas.
  • Noonan, Michael.
  • O'Connor, Timothy.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Malley, Desmond.
  • Power, Patrick.
  • Timmons, Eugene.
  • Tunney, Jim.
  • Walsh, Seán.
  • Wilson, John P.
  • Wyse, Pearse.
Tellers: Tá, Deputies Kelly and B. Desmond; Níl, Deputies Lalor and Bro wne.
Question declared carried.

When is it proposed to take the Committee Stage of the Bill?

I would suggest this day week.

I am in the hands of the House. I would prefer it sooner, but it is not a thing I want to force on the Opposition. What about next Tuesday? Would that be possible?

To show how cooperative we are I will say Tuesday, subject, of course, to the Whips agreeing.

Committee Stage ordered for Tuesday, 8th February, 1977.
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