Deputy Jim Fitzsimons has been given permission to raise on the Adjournment of the House the question of the Bula Mines situation and the Government's intention or non-intention to assist in getting them off the ground. The Deputy has 20 minutes.
Adjournment Debate. - Bula Mines.
With your permission I will give five minutes of my time to Deputy O'Malley. The reason I am raising this on the Adjournment tonight is that there is a lot of apprehension not only in County Meath but throughout the country in relation to the present situation with Bula Mines. I must remind the Minister of State that it was a previous Coalition Government who grossly mishandled this situation approximately eight years ago when £9½ million of the taxpayers' money was paid to Bula Mines for a percentage of the mine without any planning permission or without any commitment to commence mining. I would like to remind the Minister of State and the House that that £9½ million is of the order of £23 million to £25 million today. It is little wonder that there is deep concern in relation to the investment of that £9½ million of taxpayers' money.
The Minister has a duty to inform the public if it is the Government's intention to try to get something out of that investment eight years ago. Is it not time we got some return in relation to the money invested or in relation to jobs? Many people have wondered if the Minister for Industry and Commerce at that time, Mr. Justin Keating, even discussed it with the Cabinet. Many members of the present Government, including the Taoiseach and the Minister for Foreign Affairs, were members of that Government. If it was a collective decision by that Coalition Government, now that Bula have got their planning permission the Government should say that they will follow the original investment of £9½ million which is worth at least £23 million today, with a view to getting their investment back. Do they intend to waste more good money? The Government must face up to that situation.
The Government must also consider if Bula Mines are financially viable or do they intend to go it alone? If Bula Mines are not financially viable will the Government bail them out? As a member of Meath County Council in 1974 I can be quoted in the Meath Chronicle and other media as saying that the proper thing was for Bula and Tara to merge, that it was very foolish not to mine the ore body as a unit and it was very foolish to have a duplication of the most expensive machinery such as building a mill, a tailing pond and all that goes with sophisticated mining plant. I have always held that view. If Bula can go it alone and if they are financially viable I wish them well.
From the Minister's reply to a written question yesterday he apparently feels that if a Bula Mines development project emerged in which he was satisfied that it was feasible and acceptable in its various aspects he would be prepared to propose that the Government consider supporting the project financially. The important thing is whether Bula are feasible and acceptable in relation to the various aspects. It seems that Bula by their own admission are in considerable financial difficulties. They claim it would take £60 million to take their operation off the ground. In that £60 million there is a figure of £22 million debts to the bank so they are claiming that £38 million is the sum required to put the mine into operation. We know that £340,000 was due in interest on 3 January and we are also aware that there is another loan due for call up from 1 February to the tune of £3.9 million. Other problems have arisen as well as those financial problems.
Other mining experts dispute the fact that £38 million would bring the mine into operation. People who have vast experience in the whole mining area claim that it would take up to £100 million to put the mine into operation. I would like to quote from the Meath Chronicle of 7 January 1984 a report by the ICC Corporate Finance Limited, a subsidiary of the Industrial Credit Company which states:
The commercial viability of the planned Bula Ltd. mine at Nevinstown, Navan, has been disputed in reports by the I.C.C. Corporate Finance Ltd., a subsidiary of the Industrial Credit Company, and Professor C.T. Shaw of the London School of Mines....
The I.C.C. reports that it completed an assessment of Bula Ltd. for the Government in December 1981, and advised that in its view an independent development of the company's lead/zinc reserves was not commercially viable, i.e., that "a willing, informed and prudent commercial investor would not provide finance for the development of the prospect".
Whether the Government who presented the Bill were wise and prudent investors is questionable. They would need a lot more wisdom today than they had when Justin Keating was Minister when the great bloomer was made.
The report is quite detailed and confirms a view I have always held. In order for Tara Mines to increase its output the report reckons that the maximum support required from the State would be guarantees of loans for some £20 million which the company would need to raise. It is questionable whether the Government should pursue their original investment. The Government will have to decide on that. To compound the problem we have been told again in the Meath Chronicle of another development:
The Department was not prepared to comment this week on suggestions that the absence from Bula's plans of a sulphuric acid leaching plant, used in other mines to draw out magnesium oxide impurities from the ore would affect the profitability of the project by making the concentrate less saleable to the international smelter companies.
On top of that there is the absence of what is known as a cyanide plant which they have in Tara and other mines. The function of these two operations is to optimise the recovery of the ore and make it more saleable to the international smelters.
I know the situation well and there is no doubt that the ore in the Tara end of the mine is exactly the same as that in the Bula end of the mine. If Tara need that kind of sulphuric acid leaching and cyanide plant, then for Bula's ore to be saleable they will need the same.
In today's Irish Independent there was an article by Colm Rapple headed “Safety Problem for Bula”? He states that there are not two safe exits out of the mine. The second exit would be by vertical ladder up a 400 foot deep shaft. The company have many problems. I have always said that the proper way to operate the mine is to merge it as one unit but I do not wish Bula ill in any way. We have a new Minister for Energy. I wish it was Deputy Bruton who is from County Meath also. He was a junior Minister in the Government of the day who committed the cardinal boob of giving £9½ million to Bula without their having planning permission or any commitment to mine. Now eight years later we have nothing to show for it but a few trees planted. Bula tell us — I hope they are right — that if they can get off the ground there are 400 jobs there. We need those jobs not only in Navan and Meath but in the surrounding areas. The boob was committed by the Government and it behoves them to correct it as soon as possible.
I should like to ask the Minister to reply in some detail regarding the present position between the Government and Bula Mines Limited. He should tell the House what stage negotiations are at. Deputy Hilliard put down a written question to this effect yesterday. He got a very short and vague answer which unfortunately is the wont of written answers and one reason why one should try to put down oral questions on matters of this kind. It states that if a Bula mine project emerged which he was satisfied was feasible and acceptable in its various aspects he would be prepared to propose that the Government consider supporting the project financially. On what terms would the Minister do this and what does he regard as feasible and acceptable in its various aspects? As the Minister's reply was put so conditionally it is obviously his view that the present development project is not, as it stands, feasible or acceptable. I am not surprised at this.
That is the major question that must be asked but there are many others. It is correct to say that many of the questions I asked in this month seven years ago from the same benches still remain to be answered. We are no further forward than the day when the infamous Bill on Bula was introduced by the then Deputy Justin Keating in January 1977. The questions I asked then which went unanswered and were pooh-poohed as being unnecessary are, unhappily for all of us, as valid today as the day they were asked. They remain unanswered.
What is the amount of the ore reserves? We have no definite information on that. Professor Shaw has one figure and Bula Limited, as is their wont, have a much higher one. What will the market realisations be? What is the cost of complying with the planning conditions? There are nine pages of them. What would be the cost of the additional items overlooked in the planning permission which Deputy Fitzsimons has just adverted to — the fact that there is no second exit and therefore a permit to mine cannot be got from the Department of Labour, and the fact that there is no sulphuric acid leaching plant? What will be the overall cost of developing the mine? There are conflicting figures on this ranging from £20 million to £80 million. We are entitled to know before any decision is made what the projected revenues for the mine would be. Where is the management expertise? Who is going to manage the mine if it goes into production? The Government will have to answer these questions and make certain that their answers are precise before they commit further moneys to the project after the money that was so disastrously spent by them in 1976-1977, money that was out of the taxpayers' pockets.
I am grateful to Deputy Fitzsimons for giving me the opportunity to speak on the development of Bula Mines. Usually when a Deputy raises on the Adjournment a constituency matter he indicates encouragement for development and for the saving of industry. In this case the Deputy is more or less saying that this mine should not be developed on an independent basis. He made that quite clear in his contribution and I am sure his constituents will note his attitude.
The Deputy used phrases such as "throwing good money after bad". I reject that. The State is entitled to ensure that it participates in the development of our natural resources. Under the 1975 licensing terms for offshore exploration, the Government are entitled to up to 50 per cent of any development of an oil find. Is the Deputy now suggesting that the State should not participate in the development of Bula mines?
The logic of the Deputy is faulty. The attitude he took indicates to me that he has taken a similar line to that of a certain source in the mining industry in Ireland and that causes me a certain amount of discomfit. The Deputy seems to be well briefed by that source and that is unfortunate. I can assure the House neither I nor the Government will be put off by any person or company trying to divert the Government from developing our natural resources. I am disappointed the Deputy has taken this attitude in this House. To me it is an indication that he has been advised in a certain manner. Deputy O'Malley's similar attitude surprises me because he was Minister for Energy and he knows the intricacies of the development of any mining operation.
The Government are anxious that the Bula ore reserves should be developed as soon as possible having regard to the substantial employment potential which would be created in the construction and operation of the mine in the Navan area and its environs. Deputy Fitzsimons and Deputy O'Malley seem to be prepared to throw that employment potential to the winds for their own narrow political ends. I well appreciate that there is a serious unemployment problem in the area and that the commencement of a new mining operation in the area could contribute directly to alleviation of the unemployment situation and indirectly through its spin-off effect. A new mine development would, for instance, have a favourable impact beyond the Navan area in relation to transport of concentrates from the mine and from the operation of port facilities. The development of the mine would also have a favourable impact on the country's balance of payments situation.
As the House is aware, progress towards the development of the Bula mine has been slow. In the case of any new mine development a lengthy period elapses between discovery and development of the mine. In the Bula case the period of start-up has been a good deal longer than usual. One of the principal factors involved has been the lengthy planning permission proceedings which finally concluded in November last when full planning permission for an underground mine development was granted to the company. It is very much to be hoped that the company can now proceed quickly to a viable development project.
This task is primarily a matter for the management of the company. It is a task which has been rendered more difficult than usual by the substantial pre-development indebtedness which the company has accumulated over the years during which planning permission applications were being pursued. One of the principal elements in developing a satisfactory mining project is the raising of development finance. I am aware that the management of the company has been actively pursuing contacts with various interests with a view to satisfactory development arrangements and indeed my Department have been involved in certain of these contacts. It would be improper for me at this stage to give details of these contacts and discussions. What I can say is that my Department will continue to do what they can to facilitate them.
I can also say that, if a development project emerges which I am satisfied is viable and acceptable in its various aspects, I will be prepared to propose that the Government consider supporting the project financially. In arriving at their decision on any proposal that may be put before them, the Government will have the benefit of a considerable volume of professional advice which my Department have obtained on the Bula mine project. The Government, conscious of the contribution the project could make to creation of badly-needed new jobs, will give any such proposal the most serious consideration if it meets the appropriate criteria.
The Deputy has adverted to the situation that certain advisory reports presented to my Department have become the subject of press comment. I do not propose to make any statement on the press articles in question as to do so would be an infringement of the normal business confidentiality to which companies are entitled in their dealings with my Department. I would say, however, that the reports to which reference has been made form only a part of the large volume of material available to my Department in relation to the viability of a Bula mine project. As I have said, the company's management is working on a development project including the critical financing aspect. I hope that these efforts come to fruition soon and I can assure the House that when the company's proposals are presented to my Department they will be examined in a constructive and urgent way with the objective of bringing this long-delayed project into operation as soon as possible.
I am somewhat surprised that members of the Opposition, and in particular a Member for the constituency in which the mine is located, should cast cold water on the efforts of the company and of my Department to ensure that this mine is brought to fruition, in the context that there would be employment for approximately 400 people for a period of years, that it would help substantially our balance of payments and that there would be substantial infrastructural development in the area. I can only assume that Deputy Fitzsimons and Deputy O'Malley have some other political——
Will the Minister of State answer the questions he was asked instead of trying to twist the matter?
They must have some other reason for taking the attitude they have adopted here. I can assure the House that I will not be dissuaded by anyone from that side of the House or any outside commercial interest who may wish not to have the mine developed on its own as an entity.
The Dáil adjourned at 5.30 p.m. until 2.30 p.m. on Tuesday, 24 January 1984.