Minerals Development Bill, 1999 [ Seanad ] : Second Stage.

I move: "That the Bill be now read a Second Time."

Ireland has a rich tradition of mining extending back over 4,000 years and I am glad mineral extraction is still an important economic activity. In the modern era there have been many successful mineral developments which have benefited this country in terms of revenue and well paid employment. Many of these jobs have been created in relatively underdeveloped rural areas with little or no other employment.

For a small country, we have been very successful in the discovery of mineral deposits which have resulted in a number of important mines currently in operation. Our geology holds out the promise of further economically viable mineral discoveries if we continue to encourage investment in exploration.

Many Irish companies are active in this field, some of whom have made some of the most notable discoveries. However, junior exploration companies often need to form alliances with larger and more experienced partners to bring their discoveries to the next phase. It is important to encourage such partnerships with international players who bring to this country the benefits of their worldwide experience and expertise in the most up to date methods of mining and environmental protection. We also welcome responsible international mining companies exploring in Ireland on their own behalf.

When considering any country as a potential area for exploration, any major mining company will naturally be very interested in the geology and the track record of previous explorationists. There is no doubt that Ireland has its attractions in that regard. However, a less obvious but equally significant element in a company's decision to invest its exploration budget in a country is the stability of that country's political system, a clear set of laws and, in particular, confidence in the method of determining mineral rights ownership. It is essential for a potential investor to be assured that the system will allow it to obtain legal title to work the minerals it discovers. The Minerals Development Acts are intended to cater for this and have done so with various amendments since 1940.

However, every system throws up complications from time to time and it is important that these are addressed when they arise, especially if they introduce uncertainty or delays. It is to deal with some such complications which have recently come to light during the processing of mining leases and licences that I have proposed this Bill. When enacted the Bill will remove some anomalies arising from the application of the Acts, particularly the position of some minerals vested in the Irish Land Commission. This is a technical measure which does not involve changes in policy and which has no adverse implications for anyone.

The principal purpose in bringing forward this Bill is to deal with the question of certain mineral rights which were acquired by the Irish Land Commission by a variety of means. Section 2 is the relevant provision which is intended to amend the definition of State minerals in the Minerals Development Act, 1940. To give the background to this provision, I must explain certain aspects of mineral rights and ownership which are at the best of times complicated, even to those familiar with them.

There are several categories of mineral rights which can be broken down into two essential classes – private minerals in private ownership and State minerals as defined in the Minerals Development Act, 1940. It is, and has been for a very long time, Government policy that all the State's mineral resources should be developed for the mutual benefit of the State and private developers. The Minerals Development Acts, 1940 to 1995, provide the regulatory framework which enables the development of minerals, whether State-owned or privately owned. I must make clear that the range of minerals covered by these Acts does not include stone, sand, gravel or clay. Minerals in private ownership are covered by the Minerals Development Act, 1979, to which I will refer later.

The 1940 Act deals with State-owned minerals. It empowers the Minister to issue State mining leases to those who discover economic deposits of State minerals. State minerals are defined in section 5 of that Act as:

(a) any minerals and any exclusive mining right which, at the date of passing this Act, belong to or are the property of the State or the People, and are vested . in the State or in any Minister of State;

(b) any minerals and any exclusive mining right which, on or after the passing of this Act become, by any means, the properly of or vested in the State or the People or become vested in a Minister of State, as on and from the date upon which they become such property or become so vested.

Mineral rights were usually acquired by the State through dealings conducted by the Irish Land Commission under the Land Acts, 1903 and 1923. Other minerals and mining rights were vested in the Congested Districts Board and were acquired by the commission at the time of that board's dissolution under the Land Law (Commission) Act, 1923.

It was normal practice that, whenever the Land Commission divided lands it had acquired on the break up of the big estates, or assisted tenants in direct purchase from landlords, the associated mineral rights were reserved by the commission. In the case of dealings under the 1923 Act, these mineral rights became vested in the State as provided for in that Act. However, where the dealings were done under the 1903 Act, the situation was different and more complicated.

In 1931, the Mines and Minerals Act was passed which provided, inter alia, that, from then on, minerals acquired by the commission under the 1903 Act would also become vested in the State. However, for acquisitions by the Land Commission under the 1903 Act which had taken place before 1931, and for Congested District Board acquisitions, the mineral rights remained vested in the commission rather than the State. It had always been assumed that all such mineral rights were also State minerals within the terms of the Minerals Development Act, 1940. Based on this assumption, successive Ministers have, in good faith, granted State mining leases under the 1940 Act which included these minerals.

However, in the course of the investigation of mineral titles for the Lisheen mine, County Tipperary, it was brought to the attention of my Department that this assumption is likely to have been incorrect. The advice of the Chief State Solicitor's office and the Attorney General's office was sought. Both agreed that, under the definition of State minerals as it stands in the 1940 Act, even though the Land Commission is an arm of the State, it should possibly have been regarded for mineral ownership purposes as a private body. This is the essence of the problem. This distinc tion could call into question the power of the Minister to grant leases and cast doubt on the validity of leases already granted.

Section 2 of the Bill provides that the rights vested in the Irish Land Commission will be deemed to be, and to always have been, State minerals for the purposes of section 5(a) of the 1940 Act. This will mean that there can be no doubt that all minerals acquired by the Land Commission are State minerals and that all such leases granted by me or my predecessors will be valid.

To illustrate the type of complication this situation can give rise to, I can give the example of the major new zinc and lead mine at Lisheen, north Tipperary. This deposit is being developed by Ivernia West, an Irish company, with its joint venture partner, Minorco. Minorco is part of the Anglo American Corporation, one of the largest and most successful mining conglomerates in the world. I was very pleased to grant a State mining lease to the companies in October 1997 but, before I could do so, extensive research had to be carried out into the question of who holds the mineral rights. As I have said, it was during the course of this title investigation that the question of the status of the Land Commission minerals came to light. It transpired that, while most of the minerals forming the Lisheen deposit were clearly State minerals within the meaning of the 1940 Act, a significant proportion was acquired by the Land Commission under the 1903 Act.

Quite understandably, the two companies were interested in developing the whole deposit which they had found, having spent large amounts of money on exploration and land acquisition. They would not have been concerned with the subtle distinctions between State minerals and Land Commission minerals. The companies applied to the then Minister for a State mining lease over the orebody which, unknown to them, was a combination of 1903 Act and 1923 Act minerals. In examining the feasibility of the project, the applicants based all assumptions concerning the economics of the development on the entire deposit, as did my Department in its consideration of the project's viability. My Department had no reason to distinguish between 1903 Act and 1923 Act minerals since the received wisdom, until the legal advice was obtained, was that they were State minerals. Even though the 1903 Act minerals were not earmarked for immediate attention, they formed an important part of the overall reserves so the position needed to be regularised to give the companies involved full security.

Therefore, I granted a State mining lease for the Lisheen mine in respect of all the minerals I could safely regard as State minerals, given the advice of the Attorney General's office. However, to satisfy the legitimate expectation of the developers that they would be able to mine the whole deposit as a unit, I built into the lease a commitment that it would be extended to include 1903 Act minerals if and when they became State minerals. On the advice of the Attorney General I arranged for the drafting of this Bill in order to allow me to follow through on that commitment as soon as possible.

This issue also has implications for another major mineral extraction operation, namely the open cast pit of Irish Gypsum Limited at Knocknacran, County Monaghan. A consolidated lease is under negotiation between the company and my Department to give the operators continued rights of working, but parts of this deposit comprise 1903 Act minerals. These had been the subject of spent leases but I was precluded from granting a new lease over them because they were not technically State minerals. The Knocknacran deposit is the sole supplier for the plaster and plasterboard factory at Kingscourt, County Cavan, and it also provides essential materials for cement manufacture. Continued use of Irish raw materials for these essential components of construction depends on renewal of the company's access to this element of the deposit.

I am also taking the opportunity the Bill provides to address two other issues which require attention. As I explained, while the Minerals Development Act, 1940, deals with minerals in State ownership, it is also in the national interest that minerals in private ownership be developed in an efficient and rational manner. A significant proportion of the mineral resources of the State are in private ownership. It would be impractical to have to make the distinction between State owned and privately owned minerals before undertaking an exploration programme, yet exploration companies need to know that a system exists to allow them to work whatever they find, subject to a proper development plan.

For this reason, a system to regulate the working of privately owned minerals was established under the Minerals Development Act, 1979. It vested in the Minister with responsibility for mining the exclusive right to work all minerals in the State, with very few exceptions, and, consequently, the right to permit the working of those minerals by private individuals or companies. In keeping with the constitutional protection for the rights of private property, this was made subject to a right to compensation to the owners of the minerals at the time that any minerals were worked. Section 20 of the 1979 Act conferred this right to compensation on the person who had an estate or interest in the minerals on 20 June 1979. However, it also provided that this right could devolve and be disposed of. The effect of this was that the right to compensation became separated from the ownership of the minerals.

Normal transactions of selling land rights can range from conveyance in full fee simple, where the buyer becomes the owner of everything from the centre of the Earth to the heavens, to simply granting a wayleave or easement, with several levels of transfer of rights in between. Therefore, it has been possible since 1979 for someone to sell land and minerals, or even just minerals, while retaining the right to compensation for the working of the minerals. The purchaser would then own the minerals, but this would be of no value to him as the right to work them is vested in the Minister and the right to compensation is vested in the previous owner. This situation is patently absurd and one of which I am sure most buyers and sellers of land are not aware, since they are concerned mainly with the surface rights and not with the abstruse position underground about minerals which may or may not have any value.

Matters become very complicated when I wish to grant a State mining licence for these minerals and it can result in long delays while the question of entitlement to mineral rights is sorted out. Under the procedures set out in the Minerals Development Act, 1979, I must give extensive public notice of my intention to permit the working of private minerals. I am also required to give direct notice to anyone who may appear to me to have an interest in the minerals to allow individuals an opportunity to establish their ownership. However, since the persons entitled to the compensation today are not necessarily the owners of either the minerals or of the land, they can be difficult to identify and may possibly be unaware of their entitlement. If nothing is done, the position will only become more difficult as the years pass.

Section 3 deals with this problem. It will ensure that, in future, the right to compensation for the working of minerals under Section 20 of the 1979 Act cannot be separated from the ownership of the minerals and that, on any future sale or conveyance of the minerals, the right to compensation will also transfer automatically. This means that the right to compensation will vest in the owner of the minerals at the time they are developed or mined, except where a sale or conveyance, which separated the right to compensation from the ownership of minerals, has already taken place since 1979 and the owner of those minerals has not acquired the right to compensation.

I am aware the problem remains for any land or mineral rights which may have been sold or disposed of between 1979 and now. I asked the Attorney General to consider making this provision retrospective but I am advised that it would be contradictory to the protection of the right to compensation contained in the Constitution. If land and mineral rights are sold in future following enactment of the Bill, the vendor could expect to obtain a price from the purchaser which would take account of the forgone compensation. That opportunity would not be available to previous vendors who have disposed of their mineral rights, and that in itself would be liable to compensation, so the problem would remain. Therefore, I must restrict this provision to future transactions but my Department will continue to consider ways to deal with this issue.

Section 4 deals with prosecutions for a variety of summary offences which are contained in the Minerals Development Acts. These make no pro vision for who may prosecute, so it is left to the Director of Public Prosecutions to bring all such prosecutions. I have been advised by the Chief State Solicitor that, in line with other legislation, it would be more appropriate and more efficient administratively if relatively minor offences could be pursued in the District Court by the Minister or by the Mining Board as appropriate rather than involving the DPP. This is a simple technical amendment, with a consequent provision in section 5 relating to expenses in bringing such cases.

I sought the approval of my Cabinet colleagues to introduce the Bill now since the issues are uncontroversial and relatively simple to deal with, although the legal points are complex and abstruse, and there is nothing to gain by leaving matters as they are any longer, especially since the changes do not involve any departure from the policies adopted by successive Governments to date. In fact, there is a distinct advantage in administrative efficiency and in streamlining mineral ownership and rights to compensation for working minerals. However, I am aware of the need to examine the overall policy in this area and a fundamental review of minerals policy and regulatory practice in the minerals sector is under way in my Department.

This process started with the examination of the industry in 1994 by the national minerals policy review group and its report was presented in April 1995. It had many valid points to make and a large range of recommendations, some of which have already been implemented. I see the report as a useful tool in assisting the formulation of policy. However, it can only be regarded as one input. While some recommendations have merit, others may not have been practical and others have been overtaken by changing circumstances, both fiscal and industrial. For example, the group recommended a corporation tax rate of 25 per cent for the industry. In the last budget a 25 per cent rate was announced for profits from mineral extraction, along with certain other categories of business, including non-trading income. However, the industry now sees the 12.5 per cent rate which will apply to the mainstream of business profits and, unsurprisingly, has reset its target. There are many arguments for and against the lower rate, not least of which is a package of favourable allowances which mining currently enjoys, and my colleague, the Minister for Finance, has promised to keep the matter under review. However, I do not propose to discuss this matter in detail, merely to cite it as an example of the way policies and recommendations can be overtaken by events.

It is my intention, following this policy review process, to bring forward more detailed legislative proposals within the next year. I hope these will address in a rational way many of the issues and outstanding recommendations contained in the report of the National Minerals Policy Review Group as well as many other issues my Department has examined in light of recent oper ational experience. My aim will be to have a clear set of legislative proposals designed to cater for the needs of the State and the developers of our nation's mineral resources so that these resources can be responsibly and sensibly exploited for our mutual benefit well into the next millennium. For now, however. the Bill, when enacted, will clarify the position regarding minerals which are clearly in public ownership but technically were not vested in the State.

I have already referred to Lisheen in County Tipperary and the commitment I gave to the joint holders of the State mining lease for that mine. Lisheen is a fine example of a modem mine development using best available technology. Before granting the lease I had to be satisfied that the project was robust, both commercially and physically, and that it was designed according to the highest environmental standards. The project underwent a rigorous examination by my Department with the help of external consultants of the highest international standing. This involved a detailed analysis of the project economics, ore reserve assumptions, development methods and costs, and a thorough examination of the environmental impact statement, with particular regard to closure planning. The project also required, and secured, planning permission and an integrated pollution control licence from the Environmental Protection Agency. As part of both processes, my Department was able to provide expert comments on the EIS and recommendations for conditions to be attached to both permits. This mine was a first for the EPA in that it was the first, not only in Ireland but in the European Union, to obtain an integrated pollution control licence.

Public awareness of and access to the permitting processes is also essential so that local communities and the general public can be reassured that successful projects are designed and implemented to the highest environmental standards. This does not mean that there will not be objectors, but there is at least a forum for objections to be heard. This is in addition to whatever briefing and listening a potential developer engages in with neighbours and others likely to be affected by the proposal. Such dialogue must be an integral part of prudent project design because it can result in an optimal proposal to the best advantage of all concerned going into the formal permitting arena. I was encouraged to learn, therefore, that with the planning application for a project as large as Lisheen there were only six appeals to An Bord Pleanála. This is testament not only to the preparation by the developers but also to the quality of the planning decision.

The Lisheen mine was designed to produce 1.5 million tonnes of ore per annum when fully operational. This level of output will support direct employment for more than 300 people. During development, however, up to 700 people will be employed on the project. As with any major employer in a rural region, there will be indirect spin-off benefits resulting from the spending power of the mine, and its employees, which will support the local economy and generate further employment. Production of zinc and lead concentrates is due to commence by the end of this year.

Lisheen is the second major mine to be developed in recent years. In neighbouring County Kilkenny, there is a smaller but still significant zinc and lead mine at Galmoy. This mine, operated by an Irish company, Arcon Mines Limited, was granted a State mining licence in 1995 and is now in full production, providing employment for more than 200 people. Galmoy was the first new base metal mine in Ireland since Tara began operations in the 1970s. I granted two State mining licences to Tara in 1998 to work private minerals adjacent to the existing lease area outside Navan. Tara is the largest zinc and lead mine in Europe and the new licences will help to ensure that it will continue in production for many years to come.

Along with other natural resources, our mineral deposits are an important national asset and there is great potential for further discoveries. My aim is to ensure that deposits of minerals continue to be found and developed in a responsible way, for the mutual benefit of the nation and private investors. I place considerable emphasis on the word responsible because we must ensure that these activities are undertaken with particular regard to environmental protection. Our system of environmental checks and balances is intended to ensure that this is the case and we have led the way in Europe with our integrated pollution control licence system.

It is also essential that exploration and mining are undertaken with due sensitivity to the needs of local communities. Miners have to be good neighbours and must make a positive contribution to counterbalance the right to deplete a finite resource. This can be done in many ways, including payment of royalties and taxes to the State, contributions towards infrastructure and indeed job creation. In supporting responsible exploration and development we can have a mining industry which can be to the benefit of both the developers and the State as a whole and in this way mining can be made compatible with the principles of sustainable development.

To foster further exploration we need to maximise inward investment in the minerals exploration sector in tandem with investing in indigenous exploration and service companies. This puts us in direct competition with other countries with similar if not better geological conditions, all trying to persuade explorationists to invest their limited exploration budgets. Many of these countries, which used to be hostile to foreign companies developing their mineral resources, are now actively seeking such investment.

Ireland has done well against this background in attracting a good share of exploration investment. This is due in no small measure to the success of Tara, Galmoy and Lisheen. The geology here holds out the possibility of further discoveries and all three of our major base metal mines have increased their identified reserves through extensive exploration programmes. To continue to support this activity it is essential to have a rational legislative framework to regulate the industry.

The legislative measures contained in the Bill are part of an ongoing effort to keep legislation and practices in the minerals sector up to date and relevant to the modern industry. The particular issues addressed require urgent clarification and I, therefore, recommend the Bill to the House.

I welcome the Minister's comment that the mining industry currently enjoys a package of favourable allowances. It has been pointed out by outside observers that the 1992 licensing terms and agreement, concluded under Ray Burke and Deputy Molloy, appeared to contain a number of very favourable recommendations. However, we have matured a great deal in terms of how we deal with the mining industry. For example, let us contrast Lisheen with the old mine situated at Tynagh near Loughrea. Everyone is aware that the development at Tynagh left behind an ugly scar on the landscape. However, in light of the safety mechanisms we have put in place to protect the environment, we have advanced by leaps and bounds.

As the Minister stated, the Bill is designed to close off various monopolies. Companies such as Lisheen Mines would not like to leave any open-ended sites, particularly in view of the terms set out in mining leases, and the legislation is important in that regard. People have one major disappointment in respect of the mining licence the Minister granted to Lisheen Mines in 1997 and we can learn from this in the future. I refer here to the planning process. Lisheen is a classic example of a mine situated in a rural location with access to a railway line six to seven miles away. Material from the mine could have been transported to Lisduff quarry or Thurles and shipped from there by rail to the relevant port. Instead, about 40 juggernauts will travel back and forth in heavy traffic through Cork city.

About 99 per cent of freight in our ports is transported by road. There should be a policy to transport some goods by rail. This is an opportunity where, with goodwill and enthusiasm, freight could be transported by rail. It would be a much better mode of transportation. Recently, economic consultants, DKM, looked at CIE and Iarnród Éireann, the freight and passenger aspects, and made recommendations accordingly. Their concerns focused mainly on the freight aspect.

A little encouragement could have steered it in that direction. The company has £4 million earmarked for roads development. This is not a vast sum. It should have been instructed that freight was to be delivered by rail. We have a track record in this area. It is easy for me to advance the cause of Foynes because I am from there. For 26 years Magcobar exported ore from County Tipperary and it travelled on a rail link through Foynes very effectively. Mogul did it for about 15 years. Therefore, the precedent was already established.

We are all aware of the traffic volumes on our roads and the projections up to 2010 will put even further pressure on them. That is the reason I regret that in the recent mining lease and in the planning application it was not stipulated that rail should be used. It was a classic example of where it could be used. I wish Lisheen mine well. There is also involvement from Ivernia West and Anglo American, which is probably one of the largest exploration companies in the world. An environmental impact assessment was carried out and an integrated pollution licence obtained – everything was done correctly. A sum of money has been provided for restoration purposes when the mine closes eventually. A mistake was made in the past when ugly scars were left. In many cases people are looking to an alternative use for them, probably looking to landfill developments. This creates problems in areas where open-cast mining took place. Let us hope the lead and zinc concentrates will be in production at the end of the year.

Galmoy exports through New Ross, which is not a considerable distance from the mine. All this is done in the backdrop where concentrates, such as ore and zinc, are not fetching a premium price in the commodity markets. Not long ago, during its economic difficulties, Tara mines had to introduce certain production efficiencies to make its product more attractive on a tonnage basis to enable it thrive in the marketplace. Tara is a modern mine. I am glad economies have been effected there. I hope Tara will go from success to success as it is one of the largest mines in the world. I referred earlier to Tynagh but I think it better to leave that history behind us. We have progressed with regard to mining activities in recent times.

While the Bill concentrates on mineral resources, it would be remiss of me not to speak about offshore oil activity etc. The world price for crude oil is low and the Minister was probably disappointed last March when he announced that out of 155 blocks for exploration activity in the Porcupine Basin only 11 were taken up by two companies. Given that crude oil prices are low, there is not enough buoyancy in that activity for exploration companies to decide to drill. In 1977 I recall reading a banner headline, "Oil struck off the Porcupine". We are still waiting for the oil to come on shore. I remember clearly the headlines and the excitement that pursued. Obviously it was uneconomic.

I wish to refer to what is taking place off the Slyne Trough and the Mayo coastline with regard to the offshore oil exploration taking place there. In a recent statement the Minister said the flow was showing up to 1 trillion cubic feet of gas. That was disputed in a national newspaper afterwards – it was even more optimistic and mentioned 5 trillion cubic feet of gas. I understand the Minister cannot be over-zealous in making such statements because one has to be concerned with regard to the impact on shares. It is well known from people involved on the fringes of offshore oil activity that there is much excitement with regard to what is happening off the Slyne Trough. In 1996 the first drilling activity took place there and a well was sunk. In 1997 no wells were drilled. In 1998 there was an optimism following the company's return.

I have expressed my disappointment many times at what has happened. I accept the Minister's assurance that under EU law he cannot compel any company to take on Irish workers. On many occasions when I raised questions voicing my concerns, I was given optimistic answers, probably to fob me off, that discussions were taking place between the different interests and the offshore operators association to seek some effective conclusions with SIPTU. I recognise those discussions were going nowhere because the main player, Enterprise Oil, was not interested in involving itself in such discussions.

I was particularly disappointed when a service contract, which is a lucrative contract for any commercial port, was lost to Foynes in 1998 as a result of a picket by frustrated SIPTU workers who traditionally got work on the rigs. For the first time ever as a result of a fully manned rig arriving they were unable to get work on the rigs and exercised their frustration. Unfortunately, that frustration was taken out in the commercial port of Foynes. It is possible that it left a sour taste with regard to other potential uses of Foynes and the fear of hostile relations in that area. I regret that and I expressed the view that Foynes was used as a cockpit for a national dispute. That is history now. Enterprise Oil sailed off to Ayr in Scotland which has the service contract. I understand it is leaving the contract there this year and will be using Killybegs on an emergency basis when it suits. It was unfortunate that that situation developed.

When the gas comes ashore I hope the economies of County Mayo and the State will benefit. Many people are watching with great anxiety developments in that regard. We are all aware that the Marathon gas find in Ballycotton and Kinsale has a finite life and in the past 20 years produced about 30 per cent of our gas. An alternative company will be needed to replace it in the near future or, alternatively, to provide a continuous stream of gas. In my own area, Aughinish Alumina was recently bought by Glencore. They hope that, over time, they will get a chance to use natural gas. To date, a company of that size is barred from using natural gas because it would probably speed up the depletion of the finite resource in Kinsale, which is understandable. I wish the company well. The Swiss commodities company which took it over will give the firm added value and advantages with regard to buying raw materials which are important for the production of aluminium there.

I mentioned the rail lines earlier and it would be remiss of me not to mention an issue which will impact on the commercial port of Foynes and industry along the corridor from Limerick to Foynes. The Minister recently travelled the N69 route, which could be made legendary in a song at this stage. This road is extremely dangerous, although it is the secondary route with the highest volume of heavy goods vehicles. It is most regrettable that this road was not included in the operational programme 1994-9 as requiring urgent remedial work. Each year a sum of £0.5 million is allocated, but this only enables work to be carried out on a small section of the road. Recently a convoy of heavy good vehicles blocked the road for a considerable amount of time, but this was symptomatic of the frustration of the people who use it.

Much money has been spent on developing the port, but its business will be retarded unless something is done about the route. Some £15 million to £20 million is required and I hope priority status will be given to work on this road in the next operational programme. Out of frustration, a colleague of mine, councillor David Naughton, suggested recently at a council meeting that if the National Roads Authority said it would fund the interest on a loan, this money should be raised. His proposal was accepted by councillors and the county manager. Urgent action is needed. Work on a large water scheme along that route compounded the dangers associated with it.

Over many years, the Shannon Estuary project team has considered what type of industry could be attracted to the area. The estuary has been described as the jewel in the western crown. However, its potential has not been fully recognised. The Shannon Estuary project team said it would be extremely important that one could travel from Limerick to Tarbert in an hour. However, it would take at least 30 minutes to travel 20 miles. This is not sustainable and it is regrettable that something has not been done about it, especially in terms of the type of industry which exists along the route and any development which may take place in the future in a large industrial park in Askeaton.

On a previous occasion the Minister said that a decision on whether a company used rail rather than road is a matter for the company itself and he could not interfere. However, a provision should be included in the planning process in the future to encourage companies to use rail. This would be in the long-term interest of the country.

The Minister said that sand and gravel is exempt from the Bill. Sand and gravel appear to be finite resources and there is difficulty extracting them in certain areas. This trend was disturbed recently; the Minister is probably aware of this issue following the case involving the codling bank off Dunmore East. Some areas are turning to the sea bed to extract sand and gravel. The Minister is aware of the reaction of the fish ermen in Howth, Skerries and elsewhere to the idea of 0.25 million tonnes of sand and gravel being extracted from the codling bank. The Minister said it was such a small area that it would not make any difference to the sea bed and the habitat of the fish. However, this has not allayed concerns and the trend is increasing. There is extreme pressure to catch fish within the 12 mile limit at present and this development will create its own pressures in the future if it continues.

Perhaps the Minister will explain on Committee Stage why the geological aspect is the remit of the Department of Public Enterprise. It is an integral feature of mining policy and I do not understand why it has not been transferred to the Department of the Marine and Natural Resources, which appears to be the logical place for it.

The developments of recent years are desirable. The maturity with regard to mining is welcome, but the sector must be copperfastened for the future. The planning conditions must be strengthened in terms of the use of road or rail. It is not in the ultimate interest of ports and roads to have practically all traffic using the roads.

The Minister is aware of the position with regard to the fishing quotas and that trawlers have been encouraged to fish non-quota species. However, in a classic example recently, an embargo was placed on the fishing of the non-quota species of blue whiting. Other countries continued fishing the species while our fishermen, who in the main operate from Killybegs, sat in port watching them. The natural response was to complain to Commissioner Bonino and hope she took action. What action is taken against countries which continue to fish non-quota species? Are any restrictions or fines placed on them? Irish fishermen got the wrong end of the deal in terms of the allocation of the original quotas and we have paid the price recently. I applaud the Minister on his achievements with regard to new vessels, but part of the conditions attached was that they would fish for non-quota species. To where will they turn? What will happen if they opt for a non-quota species such as blue whiting and somebody says subsequently that they must stop fishing it? There lies a contradiction and I understand the fishermen's frustration about recent events.

This mirrors the frustration in recent years with regard to new non-quota species, such as horse mackerel, which became quota species. The feeling is that Ireland did not get a proper quota when they were being allocated. I do not understand how Austria, which does not have a navy or a trawler, can hold discussions each December under the common fisheries policy about the allocation of quotas to different countries. What is in it for Austria? It horse trades with other European countries to achieve concessions in other areas. However, they do not think of Ireland when they make such decisions. This concerns me with regard to Irish fishermen and the frustration they experience about the types of fish they want to catch in the future. Although I am digressing from minerals policy, I am talking about another important resource—

The Deputy is digressing. I can find no reference to fisheries in this Bill.

I am finishing on this point but I wanted to make it because—

I was waiting for the Deputy to relate what he was saying to the contents of the Bill.

—it is rarely one gets the chance to express one's concerns about this issue.

It was only a brief reference.

I have often heard people digress considerably from a brief. The legislation is quite hard to read.

That does not entitle the Deputy to go fishing.

I compliment you on your tolerance, a Cheann Comhairle. I ask the Minister to consider, before Committee Stage, my views on how ore is transported. We should try to legislate to ensure that if a rail link exists within a reasonable distance from a mine, it is used. I have no quibbles with the Bill which is an important amendment to the law. When Lisheen obtained a mining lease and sought a legal lease, certain anomalies were found. It is important that we address those anomalies in legislation such as this.

I agree with my colleague, Deputy Finucane, about transport from mines. The rail link from the Navan mine to Dublin is via Drogheda and one can imagine the chaos and damage which would be caused should the ore be transported by road rather than rail through Drogheda or County Meath because many roads in those areas are chock-a-block with traffic at present. This issue should be examined in consultation with the Department of the Environment and Local Government.

I do not know what rail connections are in place for the mines in Counties Kilkenny and Tipperary or the intended means of transport but if the ore is to be transported by road the rail option should have been seriously examined. It is probably not possible to make rail transportation of ore compulsory for mining companies if the facilities are not available but such transport would mean great savings in the repair and upkeep of roads and would also create much needed revenue for our national transport company. Perhaps the Minister might give us his thoughts on that in his reply.

The Labour Party acknowledges the need for this Bill to deal with a number of anomalies which have arisen regarding the ownership of mineral rights, particularly those vested in the Land Commission. Mineral exploration and the development of mines is a hugely expensive operation and companies will not commit the necessary level of investment unless there is absolute certainty about the legal title to the minerals they want to develop. This Bill will remove the uncertainty and make clear that mineral rights vested in the Land Commission are the property of the State. These are, therefore, State minerals for which the State can issue mining licences.

Under section 2, the provisions of the Bill are backdated to 1940, a period of almost 60 years. This must be a legislative record. Many Deputies will recall that whenever they sought to backdate a provision, Ministers always had a list of reasons for not doing so – constitutional reasons, legal arguments, cost implications, etc. When it comes to meeting the needs of multinational companies, the Government adopts a much more flexible approach. This has been the case with successive Governments.

Generations of Irish children were taught that Ireland was a poor country with few or no natural resources. We now know this is far from being the case. We have the biggest lead and zinc mine in Europe and some of the most significant such deposits in the world. However, we can legitimately ask whether we have made the best use of these great natural resources since we first began to develop them in the 1970s.

Coming from a neighbouring county, I know Tara Mines has been a valuable source of employment for more than two decades, not only for the people of County Meath but for people from County Louth and other adjoining counties. More than 600 people are employed there currently. The mine has not been without problems in the past few months, as the Minister knows. Industrial relations difficulties have arisen because of attempts by management to cut costs. I pay tribute to my colleagues in SIPTU and the engineering unions who have a difficult task there and have been closely associated with the discussions. I thank them for their contribution to resolving the difficult problems which could have led to the closure of the mine, arising from a serious fall in the concentration of zinc. Tara Mines is the key element in the economic system of the north-east and we must hope these difficulties are sorted out as soon as possible.

Significant new reserves of ore have been discovered in the past decade. The Arcan mine at Galmoy, County Kilkenny, came on stream in 1997 and the Lisheen mine in County Tipperary, which is expected to be even bigger than Arcan, is due to commence at the end of this year. This project provided about 600 jobs during construction and is likely to provide in the region of 300 permanent jobs.

There will be a great boost to the economy of those areas but there is still a question as to whether the country has received the best return from our natural resources. Return to the State comes in a number of ways – directly, through royalties and taxation paid by mining companies and indirectly, through wages and the boost to the local economy. There is no doubt that the original mining lease given to Tara Mines in the 1970s was an error of judgment, in that it based the royalties payable to the State on profits assessed on corporation tax. Given how our corporation tax system was then structured, Tara was able to avoid paying any corporation tax for the first 10 years of its operation and, thus, paid no royalties to the State, despite exporting lead and zinc concentrates with a value of hundreds of millions of pounds. It would be more logical to have a royalty payable on every tonne of ore extracted from the ground.

I understand that the leases granted in respect of Galmoy and Lisheen at least seek to address this problem by assessing the royalty payable on a percentage of turnover. Perhaps the Minister will confirm this and indicate how much the State expects to take in royalties over the lifetimes of these two mines. I am sure the Department has researched this and that the Department of Finance has an interest in it. It would be wrong for the country to lose millions of pounds by making the same mistake made in the case of Tara Mines.

The other question that arises is whether the country would have been better served by trying to process the ore rather than simply exporting it in its raw state. Exporting ore is the same as exporting cattle on the hoof, which I fought against for a long time during my trade union career. There is no added value to the economy. According to the report of the national minerals policy review group, Ireland exported approximately 350,000 tonnes of zinc ore each year during the 1980s with an average value of more than £100 million.

Notwithstanding the serious environmental issues that arise with regard to a smelter, it is an issue which should be considered again. There are a number of major mines and, hopefully, many more will come on stream in the future. Environmental standards are higher and procedures are more vigorous than when the issue was examined previously. The IDA drew up plans for a smelter in the 1970s but they were not developed. Given that two major mines are coming on stream, it is worth examining the matter again with a view to getting added value, without damaging our environment, from the ore currently being produced and exported to countries such as Belgium.

We should acknowledge the tremendous role played by those who work in the mines. One often hears discussions about the environmental and other problems associated with mines but few people are aware of the difficult working conditions for those working in mines. I wish to put my thanks to them on record. Irrespective of the origin of the company or where the ore is sent, it cannot go anywhere without the labour of the men and women who work in the mines.

The Labour Party welcomes this Bill and hopes it gets a speedy passage through the House.

Everybody welcomes this Bill. It is well known that rights such as fishing rights, shooting rights and mineral rights were attached to certain estates. This led to a great deal of controversy over the years. In some cases, despite the Minister's earlier remarks, mineral rights are still held by some estates and would not have been transferred if there were no dealings under the Acts to which the Minister referred. This should be investigated.

The rights of individual owners of land on which minerals might exist or be found must be given full consideration. The Bill vests these rights in the State but it does not provide for any compensation for the landowners. I do not know what redress they might have with regard to the compensation to which they believe they might be entitled. In the case of coalmines, there were continuous rows regarding rights to underground coal resources. They occurred in my constituency where various people claimed rights to the same portion of coal reserves. This matter should be clarified in Bills such as this.

Everybody supports the development of the country's natural resources. They are the State's assets and the State has a duty to ensure that maximum use is made of such assets on behalf of its citizens. I agree with Deputy Bell that the royalties which should apply deserve close scrutiny in the context of the leases issued by the State. In previous years, questions were raised about the royalties sought by the State. There should be a system to make the royalty proposals known to the public for a certain amount of time prior to them being agreed. People therefore, would have the right to comment on them if they believed it to be warranted. It is unfair to the taxpayer to give away a natural resource for little or no return to the State.

Deputy Finucane spoke about the problems which arise with the extraction of ore. Even if it is something as small as a quarry or gravel pit, one sees the effect it can have on roads and other infrastructure in an area. His suggestion that rail lines should be used to transport the minerals from the mines is worthy of consideration. Major damage can be done to roads, bridges and other infrastructural elements by the transportation of heavy loads of ore when the roads are not suitable for carrying such loads over a long period.

Indeed, in the planning process, local authorities should be asked to examine this aspect with regard to the charges they might impose for the damage done to roads as a result of transporting ore deposits. In many instances, the local authorities must pick up the bill for the damage but they receive no income. This issue must be examined.

I sympathise with Deputy Bell's comments on the Navan mine. I would not like to contemplate the possible condition of the road from Navan to Drogheda if there had not been a rail line to transport the ore. The amount of investment both Louth and Meath County Councils would have been obliged to make would have been far beyond their resources and they would have received no return, aside from the creation of a certain number of jobs. Everybody appreciates the creation of jobs but the overall return to the community would have been a minus. These issues must be addressed.

State involvement is a major issue and will increase in the future if gas and oil fields are discovered off the coast. What royalties will the State seek? I accept that nobody will develop these fields without the benefit of financially rewarding incentives. The multinationals are international concerns and their only interest is the bottom line in terms of what can be got from the deal. However, we have a duty to future generations to ensure we do not give away these rights and royalties at too low a value. This must be considered when licence agreements are put in place.

People expect development. They do not want to see natural resources left lying in the ground for eternity. There comes a time when we must decide whether it is more beneficial to develop a mine or leave it undeveloped as it may have a greater value at a later date. As there is State involvement in mining, royalties should be published prior to licences being agreed to allow people to comment on them if they consider there is a need to do so.

Coal was a major source of employment up to recently in the part of the country from where I come. Good employment, although it was scarce, was found in coalmines, but they are no longer in operation and the legacy of health problems suffered by some individuals who worked in them is being picked up by the State. That is not due to any action taken by mine owners who tried to look after their workers as much as possible. The technology available in the mining industry 30 or 40 years ago was a carbide lamp, a pick and coal hutch. Workers tried to pick as much coal as possible during their shifts to earn a decent salary and they did not consider the health problems they might suffer later. Consideration should be given to protecting the health of those who will be involved in future mining operations. The Minister, in conjunction with the Department of Health and Children, should examine what can be done to ensure such workers' health will be protected in the short and long-term.

As Members are aware, the Kinsale gas field is nearing the end of its lifespan. It is believed there are other gas fields, some onshore and others offshore. The Minister and his Department should endeavour to see what can be done to ensure these come onstream to fill the vacuum that will be left with the running down of the Kinsale gas field.

There is also a need to examine the possibility of widening the natural gas grid. A connection to Sligo, Longford and Mullingar has been sought long since, but there has not been any action on it. That should be examined. Access to gas is a major infrastructural boost to an area in terms of its development and the attraction of foreign industry.

While a number of licences have been issued, a time limit should apply to all future licences. If deposits found are not developed, the developers should not be able to retain the licences indefinitely, as happened on occasions in the past. Exploration licences should be granted for a maximum period of three to five years. That would ensure mineral finds that are economic would not be left undeveloped indefinitely or that developers would not take any action to ensure they are developed.

I am sure Members who live close to the Border would be concerned about rights in regard to a cross-Border gas find. It has been suggested there is gas on the Femanagh-Cavan-Leitrim Border area. What would be the position with regard to the right to explore such a gas field vis-à-vis Northern Ireland and this side of the Border? That matter should be examined. There have been small gas finds in that area over the past 30 years and some of them have been plugged and not explored.

Will the Minister confirm whether we can ensure that the benefits that accrue from the service of offshore rigs accrue to companies within the State? Recently a rig off the west coast was serviced by a company from outside the State. We should examine this matter with a view to making it a condition, where possible, that the service of offshore rigs should be undertaken by companies within the State. I do not want to make life awkward for those who draw up licence agreements, but as much benefit as possible from the servicing of offshore rigs should accrue to the State. The development of our natural resources would generate employment, but there is also an onus on us as legislators to ensure that the maximum benefit possible accrues to the State from the servicing of offshore rigs. Such benefit would accrue in terms of revenue and employment, which is imperative for the economy.

I hope the Minister will be able to clarify the position where ownership of minerals is not covered by the 1940 Act, the Land Commission Act or the 1923 Act. The issue of where minerals are not held by the State has arisen in a number of cases.

The payment of compensation in respect of lands under which mineral resources may be found must be examined. It would be unfair if a family, who may have owned land under which there is a natural resource prior to any of these Acts coming into force, were stripped of that asset, irrespective of whether they knew that natural resource was under the land. That matter should be examined. The possibility of establishing a system of arbitration to deal with such cases should also be examined.

We all welcome this opportunity to progress our mining industry. This legislation is necessary as a result of what has happened at Lisheen mine and the Minister said he hopes to introduce another minerals Bill in the not too distant future. We must maximise the benefit accruing from the mining industry to the taxpayers, who have put in place a good deal of the infrastructure that will be used to develop these resources. I appeal to the Minister to ensure that the royalties that will accrue to the State and the people from future mining operations will be announced prior to final agreement being reached on future licences.

I wish to share my time with Deputy Brendan Smith.

I am delighted to have an opportunity to speak on this Bill. I come from an area where mining has been a vital source of employment throughout the past decades of this century. Irish Gypsum and Tara Mines are two of the biggest sources of employment in the area I represent. The economy of north Meath has benefited greatly from the proximity of these two mining resources. Irish Gypsum Limited operates a major gypsum open cast pit in County Monaghan. From here gypsum is supplied to Gypsum Industries at Kingscourt on the Meath-Cavan border.

The construction industry is heavily dependent on the plasterboard produced here. As a result, Gypsum Industries is a major employer in the area and has provided a lifeline to local communities. This is an area where farms are small and land is of very poor quality. The "gyp", as it is referred to locally, has enabled farmers to remain in the area and provided a substantial boost to their incomes. The future for schools and businesses throughout the area would have been very bleak without this major industry.

Tara Mines started production at Navan in the mid-1970s. This was a major boost not only for the town of Navan but also for Kells and north Meath. The success of Tara Mines over the years has been remarkable. It has a good environmental history and an open door policy at its environmental office. The company is to be commended on its success in staff agreement negotiations. This has resulted in a profitable operation despite a continuing low world market price for zinc.

I have just quoted two examples of the positive contribution the nation's mineral resources can make to an area. The product of these industries is transported by rail to port. County Meath is lucky to have a railway line from Kingscourt to Navan and on to Drogheda port, which saves our road network greatly. The extension of the gas network to parts of County Meath in recent years is welcome. I would like the Minister to consider the extension of the gas line to other parts of County Meath, particularly rural towns and north Meath as this would attract industry there.

The chief purpose of this Bill is to address the question of mineral rights, as outlined by the Minister. There is some uncertainty in this regard. The Bill will also address the right to compensation under the Minerals Development Act, 1997. The current position could leave minerals owners without any rights. It is also difficult, if not impossible, to identify the owner of the right to compensation. This Bill will address that problem by providing that where any sale or convenience takes place involving mineral rights, the right to compensation will automatically transfer with them.

It is important that exploration continues throughout the country. Further discoveries can be made and several new companies have been attracted to explore here in the face of strong competition from other countries. Other areas will then reap the benefits which will ensue from having a successful mining industry. The country will benefit from increased tax revenue from royalties, rents and prospective licensing. This country offers attractive investment opportunities. These will secure the future of this industry. I compliment the Minister on bringing this Bill before the House.

I am glad to have the opportunity to make a contribution on this important Bill. As the Minister said, its principal purpose is to deal with certain mineral rights acquired by the Irish Land Commission by a variety of means. I welcome the Minister's commitment to the introduction of further legislation following the policy review process. I look forward to the Minister bringing forward those legislative measures in the next year.

Like you, a Leas-Cheann Comhairle and Deputy Brady, we in the Cavan, Monaghan and Meath areas are conscious of the substantial employment provided in the Kingscourt area since 1936 by the mining and subsequent processing of gypsum deposits. Great credit is due to the Creedon family and Mr. Michael Creedon, who established gypsum operations in Kingscourt in 1936. This operation started with a total workforce of six men. The first mine to be developed was at Lisnabo. Today in excess of 200 people are employed by Gypsum Industries. From 1989-91 it invested heavily in the development of the new Knocknacran mill in County Monaghan and the new board plant at the factory premises at Kingscourt. This overall investment amounted to about £20 million. In the past two years the company has invested in the region of £10 million in its plant facilities at Kingscourt. As Deputy Brady said, the company provides great employment for three counties.

The company involves itself in the local community and provides excellent employment. It has been a major employer of generations of families in Cavan, Monaghan and Meath. It started off in 1936 as a small plaster company. At present its plasterboard facilities manufacture products of the highest standard. The recent welcome growth in the construction sector has obviously added to the demand for the product. Unfortunately for some years there was a growth in imports of plasterboard and related products. I hope it will be possible to further develop our industry and reduce the level of imports.

I am interested in the gypsum deposits at Glangevlin in north-west Cavan – Kingscourt is in east Cavan. For some years there was exploration for gas in the Glangevlin, Dowra and Blacklion areas. Apparently the gas finds were not of sufficient quantity to warrant further exploration. In 1992 a detailed technical report was drawn up. This included an estimate of the resources of gypsum deposit in Glangevlin and concluded there was at least 15 million tonnes of a gypsum resource in that area and at least six million tonnes were minable gypsum reserves. That report included the estimate of the resources in the deposit and showed it was likely to be physically possible to extract a substantial tonnage of gypsum. The report also showed the Glangevlin deposit was sufficiently economically attractive to warrant further more detailed exploration work.

I was glad that the then Department of Transport, Energy and Communications invited people to apply for prospecting licences over that major gypsum deposit. At that time the Department outlined that while preliminary drilling and other studies in the area over the years identified a gypsum resource of at least 15 million tonnes and minable gypsum reserves of at least six million tonnes, the full character, extent and value of the gypsum deposit had yet to be established. Subsequently, a prospecting licence was issued. It was hoped that with the substantial work and studies carried out in previous years that the work programme for that particular licence would be of a shorter duration than the usual prospecting licence. I do not expect the Minister to have answers to the queries I am putting to him. However, I hope he and his Department will ensure the studies on the prospecting licence will be finalised as rapidly as possible.

As the Leas-Cheann Comhairle knows, the Glangevlin, Blacklion and Dowra areas have suffered great depopulation and a lack of employment opportunities over the years. People in County Cavan are very anxious for the deposits of gypsum there to be extracted and processed locally to generate employment for the local community.

Some years ago I tabled a parliamentary question, which was replied to by the then Fine Gael Minister for Transport, Energy and Communications, Deputy Lowry. I asked him if the Department would ensure that, if the gypsum deposits were commercial, all efforts would be made to ensure they were processed locally. I was most disappointed by his reply, which read:

While I would be anxious that local employment should be maximised, this will be a matter for the ultimate developer. I will have no con trol over whether he wishes to process it on site, within the State or elsewhere.

That gave a very bad impression and the wrong answer to the community which wants the natural resources which belong to this State extracted and processed locally, which would provide employment for the local community. I hope the Minister, under this or future legislation, will ensure local communities can derive the benefits from the extraction of natural resources in their area. I hope the Minister and his Department will insist the prospecting licence studies are completed as rapidly as possible. It is hoped those studies will demonstrate that the deposits are commercial and can be extracted and processed locally, which will generate much needed employment in that area.

This is an interesting debate on the State's mineral rights and the manner in which they have developed. I was particularly interested in the Minister's speech. It is not very long ago that it was fashionable to say the State had virtually no mineral resources. When I was a schoolboy it was said that Ireland was not blessed with many mineral resources of any kind. When one studied the economic development of neighbouring states, the effects of the industrial revolution and the ready availability of coal and iron ore, it was always clearly stated that this country did not have similar resources. Perhaps we did not have those minerals, but we have realised since then that we have substantial mineral resources.

I got the impression from the Minister's speech that the 1940 Act was the first legislation dealing with this issue. It is understandable that the rights vested in the State, the Land Commission and various bodies under the Land Acts would have been assumed to be State rights at all times in the interim. However, in this era of increased litigation, the Minister is right to address these issues now that they have come to light.

When I was a young teacher working near Loughrea in County Galway the Tynagh mines were being worked very actively. I came from a rural area 40 or 50 miles away, which was very similar in many respects. However, I was struck by the huge impact of the activity at Tynagh on the economic life of the area. In the early to mid 1970s Loughrea was a booming town. It did not have a huge industrial base but was a dormitory town for many people from all over the country and the world who were working in Tynagh mines at that time.

I have often thought since then about the relatively lax control regime in operation at that time, which was not several centuries ago, rather it was less than a generation ago. Some of the minerals being extracted, which included lead, were quite dangerous. There was a scheme under which householders in the immediate area of the mine were provided with milk and vegetables from outside by the mining company. The mind boggles at the kind of legal difficulties the company would have to surmount to operate a similar system today. To the best of my knowledge, and I have maintained close relations with many friends in that area, there was never a great epidemic or any suggestion that anyone suffered as a result of the mining activity, about which we are all delighted. However, there would be a very different approach to such mining and those materials today.

This puts me in mind of the position in Kilbricken, County Clare, which is between Ennis and Quin, where there are very strong local objections to an extraction proposal. In the absence of any strong evidence to the contrary, I support strongly the concerns and objections of the local community. I would not have been satisfied by the undertakings and guarantees available to them. The evidence suggests we will encounter this increasingly in the future because the deposits there may offer the kind of opportunities for employment and development which my colleagues have been talking about. Given the level of local opposition in that small community, it seems it would be impossible to proceed with the development of any mineral resources there. It seems these activities are no longer, if they ever were, welcome in an area and they are open to a good deal of questioning. It ought to be possible to provide the answers to what seem to me to be very reasonable questions. For many people, mining – or any other form of benefiting from the State's mineral resources – is something of a dirty word.

I agree with the Minister that there is a need to encourage exploration and to ensure people who believe resources might exist have the legal framework and guarantees they require to proceed. However, at the stage when one wants to extract the minerals and see an economic benefit flowing from the available resources it is much more difficult and important to encourage acceptance of the necessary operations. I do not know how that will be done, but the issue of non-acceptability provides the greatest barrier to progress in this sector.

Recently, I passed signs on at least two stretches of road where locals are objecting to a proposed quarry. Quarrying has now been added to the list of undesirable activities. It used to be travellers' halting sites, dumps, landfill sites and, in some particularly daft areas, tourist visitor centres. The latter are generally only objected to by outsiders but the objections to the others generally come from people in the immediate locality. There seems to be a growing number of activities which generate a great amount of local opposition at an early developmental stage. Unless this is addressed, any type of exploration will become virtually impossible in areas where people are prepared to mount a campaign of opposition.

The Minister referred to junior or less well-off exploration companies, which are likely to be indigenous Irish companies, and the need for them to set up international alliances in order to proceed with extracting minerals. I am pleased the Minister has seen fit to introduce clear legal guidelines to address the difficulties which arose in the recent past. I compliment him and I know he will be thorough in addressing the problems which have arisen.

The Minerals Development Act, 1940, to which I have referred, appears to refer to State-owned minerals. These State rights appear to arise mainly from various Land Acts from a very different era. Sometimes these rights were not vested in the State but in the Land Commission or the local authority of the time. The State sometimes granted mineral leases in cases where it did not have the right to do so – Lisheen is a case in point. If this were the legal position with which exploration companies had to contend, they would go elsewhere and whatever resources lie untapped would remain so. For this reason I welcome the legislation which is likely to result in considerable development.

This brings me back to my previous point about the fundamental conflict in almost every scenario between development and the environment and between development and the local community, which is manifest in housing. It has been suggested that 35,000 or 40,000 new housing units per annum are needed. If it is decided to build these houses in the middle of a town, there will be protests against destroying the green space, and if they are built on the outskirts of a town, there will be protests against destroying the countryside. If high rise buildings are erected, the development will be seen to be too intensive and too close together and if single units are built, they will be considered too scattered. No matter what approach is taken, there always seems to be an immediate campaign ready to be ignited in opposition. Members will be aware that for the next fortnight or three weeks leading up to the elections a great many words will be written and spoken in support of and, more likely, in opposition to such projects.

We have entered an era when people become apoplectic with rage at proposals that may seem perfectly reasonable to others. We must address the State's capacity to provide income and revenue for State services such as health, education, social welfare, even the social welfare system for lawyers that is the tribunals, and all the other demands on the State. We are fast approaching a time when any enterprise is likely to face the threat of being choked. While it is fashionable to say that the Celtic tiger is strong, durable and tough, I do not believe it can sustain forever these attacks on development, the provision of housing and other means of income generation for the State and the people in the face of relentless opposition.

I support the Bill. I welcome its introduction because it addresses the legal shortcomings in the current legislative framework. However, we must face up to some unpalatable facts and choices in relation to where we are progressing if we wish to continue to provide an improved level of services across a range of sectors. Nothing is more central to providing for the people than investment in resources, including mineral resources. We must be prepared to invest in and draw benefit from these resources for the benefit of the people. However, we must be prepared to use these resources sensibly and to abide by good environmental practice.

I thank the Opposition spokespersons and other Deputies who contributed to the debate on this complex issue. During the debate we had a fairly searching review of the general issues involved in mining in Ireland and highlighted some of the key issues and problems. Deputy Killeen is correct with regard to the growing opposition to exploration and mining. This problem must be overcome and mining companies have an important role to play in this regard. Galmoy and Lisheen mines have set a very high standard which is recognised not alone on a European basis, but on a much wider basis. Deputy Killeen also made the point that when he was somewhat younger people were not aware that this country had such resources. We know now that we have considerable resources and that we must manage, control and develop them. There are recent top class examples of this, not only in Ireland but internationally. Great credit is due to successive Governments and to the companies who have worked to develop these resources.

The purpose of the Bill is to rationalise aspects of the existing legislation relating to mineral ownership, to further streamline permission for mines under the Minerals Development Acts 1940-1995. For a small country, we have been very successful in the discovery of mineral deposits which have resulted in a number of important mines currently in operation. Our geology offers considerable prospects for the future.

At present there are 300 prospecting licences in operation, with exploration focusing mainly on base metals but with considerable interest also in precious metals, gemstones and industrial minerals. There are four significant mines operating currently in Ireland which provide direct employment for over 1,000 people on a continuous basis, with much higher levels of employment in the initial stages for each of these mines. In addition to the gypsum quarry at Knocknacran, which is a major supplier to the current construction boom, there are three major zinc and lead mines in Navan, County Meath, Galmoy, County Kilkenny and Lisheen, County Tipperary. When Lisheen reaches full production, Ireland will be the seventh largest zinc producing country in the world. For a small country, that is quite an achievement.

It is my aim to ensure that deposits of minerals continue to be found and developed in a responsible way for the benefit of the national and local economies. The legislative measures contained in the Minerals Development Bill, 1999 are part of an ongoing effort to keep legislation practices in the mineral sector up to date and relevant to modern industry. Along with other natural resources, our mineral deposits are an important national asset. There is great potential for further discoveries. This is important legislation which will help in the ongoing development of these resources.

Deputy Killeen raised the Kilbricken deposit, a small calcite deposit, in County Clare. There were some objections to this proposal at local level. The developer has been refused planning permission on grounds related to road access problems. A fresh planning application will be forthcoming. It is important to mention in connection with this potential development that an integrated pollution control licence has been obtained and the State mining lease application is currently under negotiation.

Deputy Brendan Smith mentioned Gypsum Industries Limited, which holds the Glangevlin prospecting licence and is working on it assiduously. If it decides to develop the deposit, there is no reason to believe it will not be processed with its other product. At present it is not in a position to make a decision on the deposit. We will ensure it comes to a conclusion as quickly as possible.

Deputy Ellis raised the health and safety of workers. The Health and Safety Authority is actively involved in regulating the safety of workers and health conditions. Compensation is already payable to mineral owners under the Acts, which also provide for arbitration.

Deputy Brendan Smith also mentioned the value of Knocknacran in County Monaghan and Kingscourt in County Cavan in terms of employment made available by the company. He is anxious that studies there will be finalised as soon as possible and that the local community will benefit. I assure him that we will watch that closely.

Deputy John Brady spoke of the success of Tara Mines over the years. Much of its contribution has been exemplary. Even at a time when zinc prices were low, and this is a problem which affected Tara Mines, it provided valuable employment in that area. I assisted its further development by granting more licences recently. Those licences will enable work there to continue.

Deputies Ellis and Finucane were concerned about the transport problem. Deputy Ellis mentioned the royalties and asked that they be published. The royalties are a matter of public record. There is a booklet published on them and every six months a report on them is laid in the Oireachtas Library. He was also concerned about the possibility of a cross-Border gas find. There would be no difficulty in sharing a resource of that kind with the co-operation which now exists. Both Deputies were also concerned about offshore rigs.

Deputy Finucane expressed concern about the use of rail and the problem of crowding on the roads. I also had ideas about the ports. The com pany, however, was free to negotiate with the ports. The ports operate now as independent commercial bodies; they are free to make their arrangements and to offer deals on this. Cork emerged as the winner.

That is not the point I made.

I am saying that we might also have had other ideas about that. Rail use presents a similar problem because we cannot say to operators that they must use one method of transport unless the State is prepared to equalise the costs. There are many others using the roads and the same should apply to them; the issues need to be addressed. I have my own ideas about the ports and the desirability of feeding from them into local regions to avoid cross hauling.

The present position at Lisheen is that there were environmental and planning studies. These reports, which approved the methods of transport and the contribution of certain funds towards the roads, were accepted. It still leaves the broader question on a national basis to be addressed. I agree that the rail system should be used to a greater extent if possible. I tried to do that with the ports. It was found, however, that the carriages used are not suitable. Iarnród Éireann would have to invest in a different size of carriage to facilitate this. That would mean more investment. It is investing to an extent but there is a need for integration on a national basis.

Deputy Finucane raised the issue of offshore exploration. I am delighted that there are good prospects in the Corrib region. Marathon has reached agreement with Saga to acquire 18.5 per cent of the Corrib licences. Saga currently holds 40 per cent. That acquisition will come to me shortly for approval. It is an indication of interest in the initial finds there. Although we are careful about what we say, the matter will have to be resolved.

Naturally, I want to see more servicing of these initial exploratory offshore drillings – the second of which is taking place – undertaken in Ireland. I will do anything I can to try to bring that about. As the Deputy mentioned, Killybegs will benefit to some extent. The ports are all open now under EU law and people can easily move to another one for servicing, which is what happened in that situation. That was a serious and unfortunate loss to Foynes in the first instance and to Ireland again last year. This year some of that work will be regained but we would like to see much more of it being done in Ireland.

When it comes to the gas coming ashore it is a very different situation. I am anxious to ensure that a great deal of the servicing will be sourced in Ireland and that the benefits will come to Ireland.

Questions were asked about the financial terms and the royalties. To refer to what Deputy Kil leen said, in the 1990s there was little interest in prospecting.

The question I asked the Minister was: what are the estimated royalties?

I want to address that in two ways. To keep it in a logical sequence, my predecessors – I may have a more kindly approach to them than people often have – were faced with a different situation. We were trying to encourage prospecting and development and the royalties and various charges were designed for that purpose. They were very successful.

The royalties for the Lisheen mine, for instance, are 1.75 per cent of revenue, that is, total turnover, per annum for the first three years of production to allow them to get started; 3 per cent of revenues per annum for the fourth and fifth years of production; and 4.5 per cent of revenues per annum for each subsequent year of production. There is also a dead rent which merges with the royalties and that is £50,000 for the first year; £100,000 for the second year; and £300,000 per annum for the third and subsequent years. That is the basis of the rents. In addition there is a £9.5 million closure provision for the proper closure of the mine at the end of its life.

Taken in the context of the development cost which is enormous at £162 million, one is asking somebody to invest £162 million and get all of this going. However, that is from where the 700 jobs came during the development period as there was huge expenditure.

The Galmoy mine is smaller and it was developed earlier. The royalties were 1.5 per cent for the first three years; 2.5 per cent for the fourth year; and then 3 per cent for each subsequent year.

The Deputy will see that the rate of royalties rose during the period between the development of the Galmoy mine in 1995, and the Lisheen mine. The minerals in the Galmoy case were private minerals and came into the private category. Royalties for the minerals in the other case are at the higher rates of 1.75 per cent, 3 per cent and 4.5 per cent.

To estimate the royalties involves making calculations from that. Deputy Bell asked the question and I could say that if he tabled a parliamentary question, we will get him the answer but on a rough calculation, in about three years – it would probably be better to say four years because then it would be at the top rate – the figure will be up to £1 million per annum for Galmoy and up to £3 million and rising subsequently to £4 million for Lisheen.

The royalties for Tara were bought out at an earlier stage. It was part of a £50 million deal which was made in relation to the State's 25 per cent equity stake.

On the question of royalties for gas and petroleum, in the early 1990s interest in exploration was at a low ebb and the future promised no further exploration. A review of the licensing terms concluded that the only way to attract the industry was to offer commercially attractive terms, including generous allowances for write-off, a low level of tax of 25 per cent and zero royalties. This strategy was successful in bringing back exploration but new production has not yet come on stream, although we are hopeful about the Corrib find.

To take the overall situation, and Marathon in the Kinsale field, over 20 years 20 per cent of Ireland's energy needs have been provided and savings of more than £3 billion on energy imports have resulted. The Kinsale gas find is running down at this stage and there is no question about it. Recently we issued some further licences which will give a little extra gas at the end in some other areas. It will get the last out of the find but it is still running down. Hence, it is probably not surprising to find Marathon with an interest in the Corrib find at this stage.

Deputy Bell also asked about the creation of an Irish smelter but this is not regarded as economically viable. The volumes and the continuity would want to be much greater. We talked about problems with mining, but the Deputy can just imagine the environmental problems of a smelter. Taking account of the overall supply of smelting facilities in Europe, a new smelter would not be viable. In other words, there are sufficient smelting facilities available.

Deputy Finucane raised the question of the N69 and I noted what he had to say about it. It is relevant to the whole issue. He also asked why the Geological Survey of Ireland forms part of the remit of the Department of Public Enterprise and not the Department of the Marine and Natural Resources. The GSI has much in common with my Department. We work closely with it on Marine Institute issues and on the seabed survey. It is possible that at some time in the future it may move closer to my Department. Currently, we work well together in any event. Deputies are generally told it is not possible to backdate provisions. Deputy Bell suggested that when big companies come along, it becomes possible to do so, but that is not really the case. Mineral rights are not private property and do not come within the scope of the constitutional protection of private property. No private citizens are adversely affected. The advice of the Attorney General is that we can backdate this provision.

Deputy Finucane expressed a wish to consider the rail system further on Committee Stage. We can certainly do that. The general position in that regard must be considered both by us and the EU.

The Deputy also asked about blue whiting and the penalties which applied in regard to the recent over-fishing. The Commission moved very quickly on the matter and the fishing stopped within two days. One of the two countries involved stopped fishing immediately and the other carried on for an extra day or two. Offhand, I cannot inform the Deputy of the penalties involved for such a breach. If a country over-fishes, the Commission examines all its figures to elicit the extra amount fished. The figure is subtracted from a country's subsequent allocation. That penalty is operated all the time and occasionally affects Ireland. As Minister, I must intervene sharply from time to time to ensure we do not exceed the allowable catch. It can be a very sore point if the Commission lowers our allocation and fishermen are unable to fish for a few extra days in autumn. Commissioner Bonino acted very swiftly in this case, as did the fishermen in alerting us to what they saw. We immediately contacted the Commission which accepted our criticism and, in turn, acted immediately to address it.

We had some difficulty in relation to the percentage figure for horse mackerel. We would probably have been due a 28 per cent allocation. There were some arguments about our fishermen's quantities but our statistics indicated a figure in the region of 28 per cent and we received 26.5 per cent. I felt that since the principle applied rigorously to us at the outset, it should also have applied at a later stage. We had quite a big row over the issue.

I thank Deputies for their contributions in this searching debate which highlighted the importance of these minerals and the necessity to look after them in a responsible manner. I will arrange for the spokespersons and any other interested parties to visit some of the mines. They are well worth a visit in their finished state and people come from all over the world to see how well they operate at Galmoy and Lisheen.

We would like to visit them.

I thank Deputies for their support.

Question put and agreed to.