asked the Minister for Energy whether the Government's proposals to provide a zinc smelter are not being proceeded with.
Ceisteanna—Questions. Oral Answers - Zinc Smelter Proposals.
27.
On 23 December 1980 I announced that the proposed Irish zinc smelter at Ballylongford, County Kerry, will not be proceeded with for the present due to low current and forecast zinc metal prices, the substantial overcapacity in the zinc smelting industry, the sensitivity of smelter operating economics to rising energy costs and other adverse factors. However, I indicated that these adverse conditions could change and that the IDA would continue to monitor the situation in the industry. That continues to be the position.
Is it not a fact that in their last election manifesto Fianna Fáil said they would certainly build a smelter because of the agreed enormous importance of such a smelter in the light of the great deposits that we have, the biggest mines in Europe? Is it not a fact that, while there are transient price falls in the recession in relation to zinc, by the time a zinc-lead smelter is built prices will presumably have gone up again and we will be just about in time for the rise in prices? In all the circumstances, does the Minister not agree that the decision made by Fianna Fáil in their manifesto was the correct one and that they should go ahead and carry out this enormously important undertaking on behalf of the State?
I agree that the references to the zinc smelter in the manifesto were correct in the light of the information then available. The Deputy, however, although he has adverted to the falling prices of zinc, has not adverted to another very important aspect of this matter: the enormous increase in the cost of energy in recent years. I am sure he is aware that energy is a very heavy part of the overhead costs of the zinc smelter. On the basis of those two items alone the position has changed radically in recent years, I have made it clear that we have not ruled out the prospect of a zinc smelter in the future but that as of now it would be quite impossible to embark on a zinc smelter with any hope of an economic operation.
Two points arise out of the reply: is it not a fact that the Soviet proposal to build the zinc smelter was not proceeded with? They would have been paid in zinc — I am sure the Minister is aware of that. This proposal was not pursued by the IDA. Will the Minister say why this was so? Secondly, in view of the real likelihood of our developing our oil resources, the question of energy — an important consideration — becomes much less important in the light of the prospect of our having our own supplies.
I shall take the second point first. I agree with the Deputy it could become very important in the future but I must reiterate what I said to Deputy Horgan, namely, we do not yet have our own oil resources. With regard to the Soviet proposal, that proposal was to provide technology and equipment, to train personnel and to build the smelter but not to own it or to take any equity in it. It was discussed with representatives of the Soviet Union and it was pointed out to them that questions of construction and supply of equipment and the training of personnel were matters that would have to be determined in the first instance by the owners of the smelter and since that or the share-out of the ownership had not been decided, the Soviet proposal would have to await determination of that decision. The Soviet representatives agreed with that proposition and in view of what has happened there has not been a decision on who should be the principals.
Would the Minister not agree that he is passing a vote of no confidence in his own Department when he talks about the cost of energy being a major factor in not proceeding with the smelter? Is it not true that the Fianna Fáil Government effectively prevented any effort to have a smelter erected?
I do not understand the Deputy's question. Perhaps he would elaborate on it?
I do not want elaboration.
At least the Deputy might give me a clue.
Fianna Fáil said they were going to build a smelter in Kerry and they made a great play of this in their manifesto. Then they decided not to proceed with the matter. If they were interested in building a smelter they would have built it close enough to the source of the ore so that it would have a better chance of making money. If ore can be exported to the Continent and the existing smelters there are able to make a lot of money, particularly with regard to downstream industries, would the Minister not agree that the smelter should be started now so that eventually it can be put into operation if the price of ore goes higher, rather than just writing it off now and forgetting about it?
As I have indicated, we have not written it off, but for the reasons outlined to Deputy Browne I cannot accept the proposition put forward by Deputy Tully. I indicated I was somewhat mystified by what he said about a decisison by the Government that prevented the building of the smelter but I understand now what he meant from what he said later — fair play to the Deputy, he was making a constituency point and I recognise that. With regard to the suggestion that I was passing a vote of no confidence in my Department because of the increasing price of energy, I must point out to the Deputy that 80 per cent of our energy is imported and we do not control the price.
Will the Minister consider handing back to the farmers the land that was compulsorily acquired from them by the IDA in the light of the fact that the Government have made a decision in principle not to go ahead with the smelter?
I can tell the Deputy we might do even better than that.
I am calling on Deputy Quinn to ask a final supplementary on this question.
I have not had a chance to ask one question.
This is the tenth supplementary question.
Is the House correct in understanding that an offer was made by a technologically developed country to build, train and provide technical services for a smelter for ore which this country has beneath the ground and that this offer was either shelved or postponed because the Government of the day, of which he was a member, were not capable of establishing a company that could hire, rent or take on that offer of services? Is that a clear and fair interpretation of the facts the Minister has given to the House?
No, it is not and I suspect the Deputy knows it is not. He knows there are many other factors involved which it is not possible to go into——
The American State Department——
The Deputy should grow up.
That is a fact.
Perhaps the Deputy believes it but nobody else does because they know it is not true.
It is the same in the Gaeltacht——
The decisions by the Government in relation to matters of this kind are made by this Government and not by another Government.
I have a good deal of sympathy with some of the statements made by the Minister on this matter——
It is Cecil Rhodes behaviour.
Will the Minister confirm my impression, which may not be accurate, that the additional energy demand a smelter would make would represent about 2 per cent of our present total electricity consumption?
I think the Deputy is correct.