asked the Minister for Energy if he has any plans to change the licensing terms for mineral exploration in order that the terms of any subsequent mining lease could be agreed in advance; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Licensing Terms for Mineral Exploration.
19.
It is long established Government policy to settle lease terms on an individual mine basis by reference to the particular physical features of the deposit concerned and to an assessment of projected profitability. The existing system is one of flexibility which affords the opportunity of mining companies to negotiate fair and reasonable mine development terms with the State on a basis specific to each new mine.
In the current buoyant state of minerals exploration activity I do not propose to introduce standard pre-defined lease terms for new finds but I will keep the matter under periodic review.
The position at the moment, as I understand it, is that the terms of mining leases are not agreed with mining companies until after they have completed their exploration activities. Unlike the oil terms introduced in September 1987 whereby an oil exploration company know exactly what they will be involved in with the State vis-à-vis participation, royalties and the tax regime, does the Minister consider that it would be right for a mining company to know the terms of an ultimate mining lease that might be granted when it is at the stage of taking out an exploration licence?
I accept that but if you set terms in advance without having any real knowledge as to what the find or discovery might be, very often, as the Deputy will appreciate, you would have to set your terms too low from a State point of view to encourage the exploration in the first place. There can be a yawning gap in the terms available in different cases but the practice has been to concentrate on what is considered to be the best approach at the time of the granting of a mining lease. Even though I have only been in the Department a short time I am quite satisfied, on the basis of current information, that this is the best approach to adopt.
Would the Minister consider that the present system operates as a deterrent to mining companies seeking exploration licences given that they would know what problems they could encounter in negotiating the terms of the licence?
Going on the experience of recent years when the number of applications for exploration licences has been very much greater than in early years, it would appear that the system does not act as a deterent. Should the position change and I am convinced that a review is necessary I will have such a review undertaken immediately. However it appears that there is no need for such a review at present. In fact there is every good and sound reason why it should remain the same.
Can the Minister indicate why he thinks the logic of his approach to this issue should be so different from that of his approach in the case of oil where it seems that the Government have set terms too low as he suggested might happen, in order to encourage exploration?
I am sorry that Deputy Bruton and I always seem to look at things from a different angle.
I am only asking questions.
There is a difference in the licensing terms offered in respect of exploration of the nature referred to in this question and those in respect of the exploration for oil. If the Deputy has any real doubts about this perhaps we could talk about it at another time.