asked the Minister for Industry, Commerce and Energy the precise terms of further State assistance being given by the Government to Avoca Mines Limited, Avoca, County Wicklow.
Ceisteanna—Questions. Oral Answers. - Avoca Mines State Aid.
11.
Since 1975 when Avoca Mines Limited encountered serious cash flow problems due to a fall in the price of copper to £500 per tonne, the State has guaranteed the company's bank borrowings. By the end of 1978, when the Government reviewed the question of further assistance to the company, the State was guaranteeing £2.3 million of the company's total overdraft of £2.85 million.
On conclusion of the review, which involved a study by a firm of international mining consultants of the prospects for a viable operation at the mine, the Government decided to maintain State support of the mine for the time being at least. The prospect of a sustained improvement in the price of copper, which has increased significantly in recent months was a considerable factor in the Government's decision.
Government support will take the form of a repayable loan to enable the company in the first instance to discharge their present overdraft liabilities and secondly to meet operational expenses mainly on the purchase of some new equipment during 1979 by the end of which it is hoped that the company will be in a position to meet their obligations from their own resources.
There can be no certainly that the improved copper price now prevailing will be maintained. Any significant deterioration in copper prices or in such factors as production costs, ore grade and ore tonnage mined could seriously affect the assumptions on which the Government's decision was based. I must emphasise therefore that the support measures approved by the Government will be kept under continuous review having regard to developments on these critical aspects of the Avoca operation.
May I ask the Minister if he is in a position to disclose the amount of the loan sanctioned or if any moneys therefrom have yet been paid to Avoca? What would be the total indebtedness of the company at the end of 1979?
The amount that was guaranteed was £2.3 million——
But the latest——
Since the overdraft had exceeded that I presume that the loan would cover that figure of £2.3 million.
Have any moneys been paid out?
I do not think they have been paid yet but I would expect that they would be paid within the next few weeks.