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Seanad Éireann debate -
Wednesday, 12 Mar 1958

Vol. 49 No. 1

Public Business. - State Guarantees Act, 1954 (Amendment of Schedule) Order, 1958—Motion of Approval.

I move:—

That Seanad Éireann approves the following Order in draft:

State Guarantees Act, 1954 (Amendment of Schedule) Order, 1958,

a copy of which Order in draft has been laid before the House.

The sum of money mentioned in the draft Order—£1,300,000 approximately—now before the House for approval is the amount necessary (i) to bring the copper mine at Avoca from its present stage of development to the stage where the mine will be ready to go into production, and (ii) repay £350,000 due under a trade loan guarantee. The copper deposits at Avoca, which were investigated by Mianraí Teóranta with the aid of Government grants totalling £543,000, were leased in 1956 to Canadian intered company, known as St. Patrick's tered company known as St. Patrick's Copper Mines Limited, to undertake their development on a commercial scale.

St. Patrick's Copper Mines Limited are a subsidiary of Irish Copper Mines Incorporated, a Canadian registered undertaking. Irish Copper Mines Incorporated are, in turn, a subsidiary of another Canadian mining company known as the Mogul Mining Corporation.

Since the lease was granted, St. Patrick's Copper Mines Limited have been actively engaged in the development of the copper deposits at Avoca with the object of commencing production on a commercial scale as soon as practicable. The company are employing on an average 350 people on development work, and expect to employ 500 when commercial production commences. The company have spent over £2,000,000 on the project up to the present, and progress reports which have been made available to the Minister for Industry and Commerce indicate that the scheme of development is being executed efficiently and expeditiously.

St. Patrick's Copper Mines Limited were dependent for their finances on their parent company, Irish Copper Mines Incorporated, who in turn are dependent upon the parent company, the Mogul Mining Corporation. Credit restrictions in Canada have seriously affected investment and development projects, and the Mogul Mining Corporation had said they have been forced to make a selection as between the projects which should be developed and those which in present circumstances, must be brought to a standstill. A further sum of approximately £1,000,000 is required to bring the Avoca deposits to the stage at which commercial operations can be undertaken, and if this sum is not forthcoming, development work will have to cease and the mine will not be brought to the production stage. To assist St. Patrick's Copper Mines Limited, temporarily, the Minister for Industry and Commerce, with the consent of the Minister for Finance in September, 1957, guaranteed a short-term loan of £350,000 under the Trade Loan (Guarantee) Acts. The financial accommodation thus made available to the company prevented a cessation of operations in September, 1957.

The promoters have been very active in their efforts to secure financial accommodation from private sources, and they succeeded in procuring an offer of a loan of £1.3 million from a Canadian issuing house. The terms and conditions of the loan would have involved a guarantee by the Irish Government of payment of interest and repayment of capital. Generally, the terms of the loan as to interest and discount rates were so onerous as to make the transaction an inappropriate subject for a guarantee by the Irish Government.

When it became known recently that an Irish company would be prepared to consider granting a loan on more favourable conditions, the promoters negotiated a loan of £1,368,420 from the Irish company. It is a condition of the loan that it should be guaranteed by the Government as to both interest and principal. The loan would be secured by a first mortgage on the present and future assets of St. Patrick's Copper Mines Limited, and in the event that the security should have to be enforced, St. Patrick's Copper Mines Limited, have agreed that the shareholders of the company shall have no interest in the assets of the company. In effect, therefore, the guarantor, viz., the Government, would become the proprietor of all the assets of the company.

The Government has given careful consideration to the question whether it would be justified in guaranteeing the loan. In its appraisal of the situation, the Government has had regard to the fact that the copper deposits at Avoca represent a national asset of considerable value. Substantial employment would be provided in the development of the deposits, and the value of production—and export trade in copper concentrates—would be important from the national standpoint. The proved deposits are sufficient to justify commercial development on a substantial scale for a period of at least 12 years.

The Government has already expended a sum of nearly £550,000 on preliminary work at Avoca and this expenditure will have been wasted if St. Patrick's Copper Mines are unable to procure the additional funds which are now needed to complete the development work. While the Government is most reluctant to contemplate the possibility that it would be necessary for it, if it guaranteed the loan, to enforce its security, nevertheless the fact remains that, if the security had to be enforced as a result of default in repayment by St. Patrick's Copper Mines Limited, the Government would acquire control of an undertaking on which more than £3,500,000 will have been expended and which will have been brought to the stage of full development.

The Government appreciates that the substantial fall in the price of copper in the past year or so has created difficulties for St. Patrick's Copper Mines Limited, and is a factor which must be taken into account in deciding whether or not it should guarantee the loan. From its peak of £436 a ton in March, 1956, copper has dropped to about £165 a ton. This collapse is due in large measure to the increased production which the rising price of copper set in train.

Authoritative sources state, however, that mining development has not been planned on the assumption that copper would remain at over £400 a ton for long but was based on conservative estimates of £220 to £240 a ton. Competent authorities say that the fall in the price of copper is sharper than most observers in the industry would have cared to predict and that the present price is lower than the oversupply position justifies.

The outlook for copper is regarded as hopeful because of the prospective growth of electric power and of industrial output which will involve an increase in the world demand for electrical equipment and apparatus made from copper. The size of known copper reserves is said to be remarkably small, and the prospects for mines such as that at Avoca are reasonably good in the light of estimates that world consumption of copper will increase by 1,000,000 tons (or 33? per cent.) between 1956 and 1960.

The Government has had the benefit of a report on the Avoca mine prepared by a well known investment trust having substantial mining interests (including copper) in various parts of the world. A study of the report shows that the trust formed a distinctly favourable impression of the Avoca deposits. It is stated that the development and construction work at the mine is proceeding in a very workmanlike fashion and that the approach is imaginative, yet sound.

The original estimates of mining and milling costs made by the Mogul Mining Corporation have been confirmed by the report and the estimates of mineral reserves made by Mogul have been shown to be conservative. The mill design is stated to be sound and anticipated recoveries and costs are reasonable and are supported by laboratory tests. The crucial factors are the anticipated forward price of copper and the possible sale of pyrites concentrates which will be obtained as a by-product.

A decision regarding the guarantee of the loan obviously depends upon many imponderables. A risk has to be taken, but it is a calculated risk, and, unless it is taken, there can be no hope that the development of the Avoca mine will be undertaken in present circumstances. The Government has reached the conclusion that it would be justified in guaranteeing the loan and recommends that Seanad Eireann approve the draft Order, under the State Guarantees Act, 1954, which has been laid before the House.

I rise, I am afraid, to speak in opposition to this motion which seems to me quite extraordinary, in the general circumstances in which it arises, and those which we remember two years ago, in March, 1956, when we debated the question of tax concessions to these various companies under the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Bill, 1955. It was pointed out then by several Deputies and Senators that Mianraí Teoranta had done an excellent piece of work in doing the prospecting upon which the State had spent something like £500,000 which would be paid back by these new Canadian and Irish companies—that, in fact, the work of prospecting had been carried out so efficiently and well that the Canadian mining experts were convinced that the situation was such that they could come in here and make a not inconsiderable profit.

I do not think it is an exaggeration to say that, in such enterprises, the major risks or perhaps the most hazardous part of such work lies not infrequently in the prospecting, which may result in nothing in the end. But, once the prospecting has successfully been carried out, once it is apparent that there is a considerable amount of metal ore in existence at a particular place, then the degree of risk is considerably diminished.

That the work of Mianrí Teoranta was excellently done, that their conclusions were soundly based, is not denied by anybody, and is, in fact, made clear by the Minister, Deputy S. Lemass, in the Dáil, speaking on this State Guarantees Act, 1954 (Amendment of Schedule) Order, 1958, as reported in Volume 165, column 64, when he says that he had anticipated

"...that these deposits would turn out to be a considerable national asset but, in fact, the investigation of them has disclosed that they are even more important than I then assumed."

There is no doubt, therefore, but that the work of the original prospecting company was well done, and that their conclusions were, if anything conservative when they said that there is copper there, and that there is money to be made out of it. In the original debate on the Finance (Profits of Certain Mines) Bill, I suggested here in the Seanad, as reported at column 1289 of Volume 45:—

"The position, then, as I see it, is that the taxpayers of the country have taken the major risks of prospecting, and the mining company is now going to take the minor risk of exploiting, secure in the belief, on the basis of the preliminary work carried out by the prospectors, that there is a not inconsiderable profit to be made. I, personally would prefer to see a State company develop the community resources for the benefit of the community, employing necessarily all the foreign technical aid required, but maintaining the ownership and the control of the profits, if any, of this mining company here in this country."

Nothing that has happened since has led me to change my mind about that. However, one point was made by a Fianna Fáil Senator at the time— Senator Cogan—that the great thing about this agreement with the new company was that the £500,000 that the Irish taxpayer had spent upon the admittedly rather risky prospecting ventures was to be paid back to the Exchequer under agreement by the new company. I will quote what Senator Cogan said on that occasion, as reported at column 1279 of Volume 45 of the Seanad Debates:—

"The wisdom, foresight and courage of Deputy Lemass in this respect have been completely vindicated, and I think it is satisfactory that we find that the entire sum of £500,000 which was spent by the State in the exploration and development of those particular mines will now be recouped in full to the State. That is something which must cause pleasure."

I recall, when I quote that to the Seanad here to-day, that we are being asked to guarantee a loan of £1,300,000 now to this company, a major argument in favour of which used to be that they were going to pay us back the original £500,000 that we had spent on prospecting. It looks very much to me as if we are going to lend them £1,300,000 in order that they will be able to pay us back £500,000, if not at once, at any rate, some time.

Senator Cogan also said on that occasion, on the same point, as reported at column 1281:—

"As I understand it, the Canadian company proposes to hand back to the State the entire sum that has been expended on mineral development in the Avoca area. That means that the Minister will have at his disposal a sum of £500,000 for further mineral development and I hope that that money will be used for that purpose."

The argument that was then being used in order to convince us that the kind of concessions being made to this company, in the way of allowing them complete taxfree profits for the first four years of working, and levying only half the tax rate on profits for the next four years after that, was that we should have this £500,000 back from them, which, in the contention of at least one Fianna Fáil Senator, would be at the disposal of the Minister "for further mineral development".

I suggested at that time, and I think other Senators agreed—some did —that the major risk had already been taken by the company financed by the Irish taxpayers. At column 1286 of Volume 45 of the Seanad Reports, I am recorded as saying:—

"...the position as I see it, is this: the preliminary work of prospecting, what I would call the dangerous, risk-bearing work, was carried out in this country at the taxpayers' expense, and now that it has been discovered, at the cost of, I think, nearly £500,000 to the taxpayer, that there is a possibility of extracting valuable ore from these mines, at that very moment, we say: ‘Right: since the element of major risk has been removed, we now pass it over to private enterprise.'"

That seemed to me to be a mistaken policy at the time. I hope that it has become apparent since that it is considerably more mistaken, or that at least it is more obvious that it is a mistaken policy.

Senator Hayes suggested at that time that the great advantage of getting the foreign company in was that we would not be risking our own money, and that if they failed it would not be our money, but theirs, that they would be losing. Yet we are asked to-day to allow our State, our taxpayers, to guarantee to this company a loan of £1,300,000. On what security? On the security of the mines we leased to them. The thing we can look forward to by way of security is that we can get the mines back again—mines on which a not inconsiderable sum of money will have been spent, admittedly, but a not inconsiderable portion of which money will have been our taxpayers' money.

I might quote the Minister in the Dáil Debates at column 64, Volume 165. He says:—

"In our appraisal of the situation——"

meaning when they had decided that they would guarantee this loan of £1,300,000

"——we had regard to the fact that these copper deposits in Avoca represent a national asset of very considerable value."

That is the national asset which we lease to a foreign company, to which foreign company we are now going to lend money on the security of this very considerable national asset which we leased to them.

I am not a great admirer of the capitalist system, but I think this particular example of the workings of the capitalist system is not even fair to the capitalist system itself.

We guarantee this money on the security of the mines we lease, and if we are not paid back this money we will get back the mines we leased. I mentioned that one Senator, Senator Hayes, said on the last occasion that the great advantage of passing this over to a foreign company was that it was their money that would be risked and not ours. Apparently that advantage is swiftly disappearing. I may quote Senator Hayes, as reported at column 1295, Volume 45 of the Seanad Debates:—

"They will spend their own money in developing these mines——"

and, a little further on

"If they fail they will have lost their own money, not ours."

Well, the situation now is that we are going to guarantee a loan to them, again from the strength of our own native taxpayer, to the tune not of the £500,000 we were hoping to get back but of £1,300,000.

I suggested then, and I might perhaps be allowed to suggest again, that we are over afraid of State enterprise in this country. Indeed, in that Dáil debate on the original Bill, Deputy Lemass, as he then was, challenged by the then Minister as to whether he was in favour of State enterprise, said he was not, that he had "no confidence in State enterprise".

Consequently both the Government of the time and the Opposition of the time seemed to be against State enterprise and in favour of the rugged individualism of private enterprise and private capitalist venture. But this private capitalist venture has now to be backed apparently by the public taxpayer, and if it loses the public taxpayer's money, it will compensate the public taxpayer for that by giving back to the taxpayer what the taxpayer originally leased to it.

I suggest that we had a more intelligent attitude towards foreign "knowhow" in the days of the Shannon scheme—which was hotly attacked at the time, but in relation to which the Government of the day decided—I think rightly—to seek and take expert advice, and then to thank the givers of that advice, pay them, send them home and run the Shannon scheme ourselves.

What we do now is to ask the foreign experts not merely to give advice, but to run the whole show, to come in and be presented with tax-free concessions for four years, and half-tax rates for the next four, and if that is not enough to lend them £1,000,000 or so if they cannot pay what they originally contracted to pay us when we leased them the mines, and they promise that if they cannot pay this sum back, they will at least give back the mines.

I should like to feel that we as a community had a little more self-confidence. We are told, of course, that "know-how" is brought in, and so on. There is a mistaken impression in this country that "know-how" is purely an import. I believe we have a considerable measure of "know-how" in this country, and even in relation to such things as mining. I am not speaking in criticism of the Canadian experts, for whose competence I have the greatest admiration and respect, but I have admiration also for the competence of our own experts, and I find quite frequently that they are not merely as able but as up-to-date, and as well abreast of developments in other countries. I might cite an example.

When preliminary inquiries were going on before the Canadian company was set up, or agreed to come in, they sent experts over here. It so happens that one of the points they were making inquiries about was the question of whether it would be possible to set up a small smelting plant here, or whether it would be necessary to export the aggregate, and have it smelted down, either in Canada or somewhere else. I asked a question about that the last time, and the Minister told me—mistakenly, as I learned later—that it would cost £3,000,000 or £2,500,000 to set up a smelting plant here. I have since found out that the sum should have been £300,000 and not £3,000,000. It was probably a slip of the tongue, but nevertheless the fact is that a smelter can apparently be set up far more easily here than was stated.

When these Canadian experts came over here, they were told by experts of Mianraí Teoranta of a small-scale similar experiment which was going on in Finland, where great success was being achieved, and where the small smelting plant was enabling the Finns in the development of their metal ores to bring about a slow steady development, related to home needs, and not related simply to the export or world market. This was bringing lasting benefit to Finland, and was not approached by them with the purpose in mind of sucking the mines dry quickly and then closing down, but of satisfying home requirements and keeping the mines going as a long-term national asset. The Canadians were very much interested in that small smelter, and they flew two experts to Finland, upon this Irish information. These experts studied the facts there, and I suppose what they learnt comes now under the term of "Canadian know-how".

Our own people, with half the encouragement we gave to foreign investors and foreign experts, could have done precisely the same thing, or possibly even better. Our experts would have not merely their own "know-how", but access to other experiments and to knowledge of conditions obtaining elsewhere. I believe, therefore, that we could have developed our own resources here just as well, if not better. But no, we decided that we need a ruggedly independent representative of private enterprise, in the form of a foreign company sponsoring an equally rugged but partly Irish company, which rugged independent company would nevertheless have to be cushioned by tax concessions, and bolstered up by State loans, and persuaded into doing what could be perfectly well done by ourselves—far better perhaps, and with less need, perhaps, for public subsidy, either short or long-term.

If we compare the attitude of our State and our Exchequer to the Voluntary Health Scheme in this country, where the absolute maximum guaranteed as a loan was £50,000 for the entire scheme for the whole country— a repayable £50,000 at full current interest rates—we recognise that we seem to be more generous—a good deal more generous—to the foreign "ruggedly independent" representative of private enterprise, than we are to a scheme, such as the Health Insurance Scheme, which is non-profit-making and quite demonstrably calculated to result in wide public benefit.

The public mining company, however, carried on for private profit, and with big tax concessions already, is to be lent this £1,000,000—or rather we are to guarantee the loan to it of £1,300,000, and guarantee it with the full strength of the taxpayer's money.

I believe that such a sum of money could have been far better used by a State mining company, set up and directed by those highly skilled engineers and administrators, who made such a brilliant success of the original prospecting venture under Mianraí Teoranta, to which I think not sufficient credit has been given when talking about "know-how" and "expert knowledge", and so on. This would have been, in my contention, of great and lasting public benefit.

The major disadvantages of depending on foreign investors instead of on our own community emerged in the Dáil debate on this same motion which is now before us. I quote the Minister again, as reported in Volume 165, columns 62 and 63, in which he says:—

"Credit restrictions in Canada, which became quite acute in the past year, have seriously affected all investment and development projects and the Mogul Mining Corporation informed me that they were encountering difficulties in financing the completion of the development work at Avoca. They said they were being forced to make a selection between the various projects in which they were interested with a view to deciding which of them should go on and which of them in the circumstances should be brought to a standstill."

Further on, he says:—

"Therefore, I gave a trade loan guarantee for £350,000 which was raised by the company on a short-term basis from an Irish bank. If that financial accommodation had not been made available to the company they would have had to cease operations in September last."

He goes on to mention the fact that there was a Canadian company prepared to give them this sum of £1,300,000, but only on conditions which the company were not prepared to accept, and which the Government here felt to be too stringent. So that we, the taxpayers, are apparently prepared to lend on conditions which the Canadian capitalists do not think quite good enough in the circumstances. I do not think I need stress the fact that the major disadvantage of getting foreign investors to develop the resources which we ought to be developing ourselves, is the fact that if they encounter difficulties, if credit restrictions develop in Canada, the Irish development project would be dropped; whereas if we put the money into our own projects, we could continue them at our own rate, without, perhaps, making the immense forward strides that would be possible if the project were solely related to the world market, but producing perhaps something of more lasting benefit to our people.

For all these reasons, I am opposed to the whole principle of State handouts to enable private industrialists to succeed where, apparently, under the ordinary conditions of capitalist economy, they could not raise the capital. We are asked to praise private enterprise, to praise the profit-seeking, system and yet apparently this company cannot find the money, cannot raise the wind, within the terms of the ordinary capitalist economy, so that what we are doing is favouring and making possible investment in something, which, in terms of ordinary capitalism to-day, is uneconomic; and we are doing this without having any working control over the enterprise. We are doing this for the sake of a private profit-making concern. They have "run into financial difficulties", the Minister says, so the State comes along and helps them out, and guarantees a fat loan.

If this had been a State company, and if it had run into the same kind of difficulties, everybody in the country would have been running up and down saying: "There you are; they do not know how to run things. Now they are asking for £1,300,000." If this was C.I.E., the E.S.B., or Bord na Móna everybody would be shouting that State enterprise was no use, was inefficient, and that what we really needed was the "know-how" of private capitalists.

I suggest that this "know-how" has been mainly used for the purpose of persuading the Minister, and, through him, the Irish taxpayer, to put up £1,300,000 for the purpose of helping these people to pay back £500,000, which we spent in doing the most risky part of the work, the original prospecting. In other words, we are earnestly endeavouring to make the worst of both worlds. We have none of the advantages of State control and direction, none of the advantages of a self-financed private enterprise; and under this motion we are asked to opt for all the disadvantages of Statefinanced, State-guaranteed, private enterprise for private profit. For that reason, I propose to vote against this motion.

First of all, I should like to welcome the Parliamentary Secretary to the House, and I do so with a great deal of pleasure, having always found him a very pleasant colleague in the Oireachtas. When the Parliamentary Secretary was about three-quarters way through his brief, I thought: "Oh, this is a very schoolboy kind of production." Then, skilfully enough, in the last quarter of the brief, the Parliamentary Secretary really produced the genuine article out of the hat. The reason we have this motion before us to-day is primarily the fact that the price of copper dropped from £435 to £165. I had not got those figures quite as accurately myself. My recollection is that there are about 15,000,000 tons of ore at Avoca and those areas, of which about 1 per cent. is copper. Might I say that at a time when the price of copper was a great deal higher than it is to-day, a former Minister for Industry and Commerce, having got all the reports of the prospects, he and his Department started moving around to see if they could get anybody to take up the project.

The sky became suddenly blue and, hey presto, here was a Canadian company prepared to come in and do the job. The Government was astonished, and rightly astonished, because there is in Dublin one of the most distinguished copper-mining men in the whole world, and he had more or less told the Government that there was not a hope for this project, and he had gone to some trouble about it. In these circumstances, I think there is no option really. The company having put £2,000,000, according to the statement of the Parliamentary Secretary, into this project, the only option open to the Government would be to buy the concession back, pay them some sum, whatever it would be, for what they had done and then proceed to run it themselves.

I think that neither the then Opposition in the Dáil—and I will not go into the details of the tremendous furore made about it at the time—nor Senator Sheehy Skeffington has been vindicated. I must say I was flabbergasted at Senator Sheehy Skeffington who, instead of coming here in sackcloth and ashes to read out what he said on this Bill, has now adopted his present attitude. He referred to the enormous gift which we were giving away, but it does seem to be rather a Greek gift. Owing to conditions having changed in Canada, and the price of copper being what it is, I doubt if any Canadian, or any other finance house, would provide this money for Avoca without a State guarantee. Nobody could be enamoured of it, but I would like to say in relation to what Senator Sheehy Skeffington has said, that in the conditions that come into the financial provisions of the Central Fund Bill, what the Senator wants us to do is to make more and better provision for us to lose money.

That is what the motion is asking.

There is one other thing which the Senator said and upon which I would take issue with him. I think he does not understand the point when he refers to a reduction plant costing £3,000,000. There are two kinds of reducing plants, one kind costing £300,000 and then there is the type of plant which produces fine copper. It is a different proposition. They have already put up at Avoca a plant to reduce the ore to 6 or 7 per cent. to enable it to be shipped abroad.

On a point of personal explanation, I was aware there were two kinds. I was quite definitely referring not to the orereducer, but to the small smelter, which could be erected, I understand, for £300,000.

An oil refinery is being erected at Cork Harbour at a cost of £12,000,000. The equivalent of an oil refinery could be put together in a laboratory at a cost of a few shillings. One is quite as irrelevant to the other as is one smelting plant to the other. This can be an economic proposition and the Canadians have approached it in this way. Nobody, naturally, with conditions as they are, welcomes a guarantee of £1.3 million to a company for the purpose of saving some other money, but I do not see any reason at all for opposing the suggestion which the Parliamentary Secretary has put before us to-day.

I want to thank Senator O'Donovan for his kind remark at the opening of his contribution. In dealing with this question of whether the State should guarantee the loan to the company that is in negotiation with a private company, it is well for us to deal with it as the situation presents itself to-day. The decision, of course, to give a lease to the mining company was taken some time ago by the previous Administration and was agreed to by all Parties represented in the Oireachtas. On the basis on which that decision has been taken, the Government, in considering the present difficulties of the company in regard to the continuance of their business to bring the mine to a point where it can be developed as a producing unit of copper within the country, felt that it was absolutely essential that the company should be facilitated by this guarantee.

It is true, as Senator O'Donovan has pointed out, that the Canadian company has invested in the mine, in development only, the sum of £2,000,000. What we are asking for here is that the company will be afforded the opportunity to borrow the amount of money necessary to develop the mine further and to bring it to perfection. We are not asking the State to advance the money, but we are securing, in the terms of the agreement, that, should the company fail to sell copper and fail in their obligations under the terms of the guarantee, the mine in which £3,500,000 will have been invested by them will revert to the State. A decision can then be taken, if such an eventuality arose, as to whether or not it would be advisable to set up a State-sponsored company, as advocated by Senator Sheehy Skeffington. That would be a matter for decision by the people who would then be charged with the responsibility of dealing with this question.

This situation has been brought upon this company by the steep fall in copper prices, and by the fact that, in Canada, credit restrictions are such that they cannot borrow any further money there. The Government, in enabling this company to proceed to go into business, to put copper on the market, are assured that the £500,000 originally invested by Mianraí Teoranta, will be made secure to the State.

I do not know if there is very much further to say on this matter. It is a question as to whether the company is to continue at Avoca to do the work which they originally came in there to do, and I think it would be very bad policy at this stage to prevent them from continuing in this work. We would have the mine on our hands and we would have to proceed to develop the business ourselves, or ask somebody else to come in and develop it for us. We must also take into consideration the fact that the reserves of ore at Avoca are estimated at 20,000,000 tons and with 1 per cent. copper, which represents 200,000 tons of copper, at a price of £165 a ton would be worth about £33,000,000 to the country. That does not take into account the value of pyrites which could be quite substantial.

As far as the provision of a smelter is concerned, it is well for us to know that the company have the last say in this matter. They are the experts, and they say that it is not feasible to have such a process carried out here. They feel that, being an independent company, with their money invested in the mine along with the money guaranteed to them now, the onus is on them to say whether it would be feasible to enter into that portion of the business or not. The fact is that if the loan is not approved, the mine will close down, and it will be a long time before it will be opened again by the St. Patrick's Company or by anybody else. The Seanad should in its wisdom approve of this Order, and I ask it to do so.

Might I ask the Parliamentary Secretary two questions, arising from his reply? The first arises from his suggestion that if the company were to fail, we could then make our decision as to whether we would set up a State company or not. The question I should like to ask is: why must we always wait until an enterprise which has been developed by private enterprise goes bankrupt——

An Leas-Chathaoirleach

The Senator had his chance. He may not enter into that. We cannot have a Second Reading speech, and the Chair will not permit questions which will bring about that situation. If the Senator wishes to ask a straight question, not a hypothetical one, I will permit it, but we cannot have any philosophising on the problem.

I shall cut all references to philosophy, and simply ask the questions arising out of the statement of the Parliamentary Secretary. The other statement he made, as I understood it, was that the possibility of erecting a small smelter was a concern of the company and that they had decided that it was not feasible. The question I should like to ask is: does he know whether or not that decision as to the non-feasibility of a small smelter is due to the fact that they aim at large-scale short-term exploitation, extracting all the copper they can in the first eight years or so, and whether it would become feasible if the aim was rather a slower, longer development, to meet not so much the world market as home requirements?

There would not be enough production in the country for a full-time or large-scale smelter.

Question put and agreed to, Senator Sheehy Skeffington dissenting.