Minerals Development Bill, 1999: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for the Marine and Natural Resources (Dr. Woods)

Ireland's success in developing its mineral resources has created well paid employment, often in relatively underdeveloped rural areas and has provided significant income to the State. We now have a number of important mines in operation and I believe there are good prospects for further discoveries but these will only be made if we can continue to attract investment in exploration.

A significant element in any international exploration company's decision to invest money is the system of mineral rights ownership. The first requirement is a system which ensures that a successful company can be confident it can obtain legal title and I am satisfied that the current Minerals Development Acts cater for this. However, it is also important that unnecessary complications are avoided, especially if they introduce uncertainty or delays. The main purpose of this Bill is to clarify some anomalies which have come to light during the processing of mining leases and licences, particularly the position of some minerals which are vested in the Irish Land Commission. It is a technical measure with no adverse implications for anybody.

The principal provision of the Bill, contained in section 2, is to amend the definition of State minerals in the Minerals Development Act, 1940. This amendment relates to mineral rights which were acquired by the Land Commission by a variety of means. To outline the background to this provision, I need to explain certain aspects of mineral rights and ownership which are at the best of times complicated, even to those who are familiar with them.

The Minerals Development Act, 1940, provides a regulatory framework for the development of State-owned minerals. Those in private ownership are covered by the Minerals Development Act, 1979, which I will go into later. The 1940 Act allows me to issue State mining leases for State minerals to the discoverers of economic mineral deposits so they can be developed. State minerals are defined in section 5 as including:

(a)any minerals and any exclusive mining right which, at the date of passing of 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 property 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.

The main way that such rights were acquired by the State was through dealings by the Irish Land Commission under the Land Act, 1903, the 1903 Act, and the Land Act, 1923, the 1923 Act. The commission also acquired whatever minerals and mining rights were vested in the Congested Districts Board at the time of its dissolution under the Land Law (Commission) Act, 1923.

In general, whenever the Land Commission divided lands vested in it, or assisted tenants in direct purchase from landlords, the associated mineral rights were not transferred to the new owners. Instead they were reserved initially to the Commission itself. In the case of dealings under the 1923 Act, these mineral rights became vested in the State. The situation was different and more complicated, however, where the dealings were done under the 1903 Act. Following enactment of the Mines and Minerals Act, 1931, the 1903 Act minerals also became vested in the State. However, for pre-1931 acquisitions under the 1903 Act – and Congested Districts Board acquisitions – the mineral rights were vested in the Land Commission itself. It had been assumed until recently that all such mineral rights were State minerals within the terms of the Minerals Development Act, 1940, and, as such, they have in good faith been included in many State mining leases issued under that Act by successive Ministers.

My Department has now been advised by the Chief State Solicitor's office, however, that this assumption is likely to have been incorrect. The Attorney General agrees with this advice. 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 could call into question the power of the Minister to grant leases and cast doubt on the validity of leases already granted.

Since this Bill was initiated, the Minister for Agriculture and Food has made an order, dated 30 March 1999, entitled the Irish Land Commission (Dissolution) Act, 1992 (Commencement) Order, 1999. That order gives effect to the dissolution of the Irish Land Commission, as provided for in the 1992 Act, by appointing 31 March 1999 as the day on which that Act came into operation.

One of the effects of this order is that, as and from 31 March 1999, all rights, title and property of the Irish Land Commission became vested in the Minister for Agriculture and Food since the ILC has now ceased to exist. This means that the various mineral rights referred to in this Bill are now State minerals within the meaning of section 5(b) of the Minerals Development Act, 1940, at least with effect from 1 March 1999. Of course, when this Bill was being drafted, I was not aware that this would be the case.

Notwithstanding the dissolution of the ILC, the situation regarding leases already granted still needs to be addressed, as do the other issues covered by the Bill. This Bill provides that the relevant rights will be deemed to be, and to always have been State minerals for the purposes of section 5(a) of the 1940 Act. It will, in effect, establish a separate category of rights which were formerly vested in the ILC, relating only to minerals, upon which I can rely to exercise my powers under the Minerals Development Acts. The passage of the Bill should still proceed, therefore, and will not impact on the rights vested in the Minister for Agriculture and Food. Section 2 of this Bill, if enacted, will mean that there can be no doubt that all minerals acquired by the ILC are State minerals and that all such leases granted by me, or which have been granted by my predecessors, will be valid.

I will give an example of the type of complications which have arisen. In October 1997, I was pleased to grant a State mining lease to the developers of a major new zinc and lead mine at Lisheen in north Tipperary. This mine is being jointly developed by an Irish company, Ivernia West, and their joint venture partners, Minorco, which is a part of the Anglo American Corporation, one of the largest and most successful international mining conglomerates. While most of the minerals forming the Lisheen deposit are clearly State minerals within the meaning of the 1940 Act, a significant proportion was acquired by the Land Commission under the 1903 Act. It was during the course of title investigation for the Lisheen lease that the question of the status of these minerals came to light.

The companies were understandably interested in the whole deposit which they had found and were not concerned with the niceties of the difference between State minerals and Land Commission minerals. Their lease application was based on both the 1903 and 1923 Acts minerals and all assumptions concerning the economics of the development, on the part of both the applicants and of my Department, were based on the entire deposit. While in 1903, minerals were not part of the area of immediate attention for the mine, they did form an important part of the reserves and the position needed to be regularised to give the companies involved full security.

The lease which I granted could cover only the State minerals. In order, therefore, 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. One of the reasons I proposed this Bill was to allow me to follow through on that commitment.

This issue also had implications for the Irish Gypsum quarry at Knocknacran, County Monaghan, part of which also relates to 1903 Act minerals. A consolidated lease is under negotiation between the company and my Department to give the operators continued rights of working. This deposit supports the plaster factory at Kingscourt as well as providing essential materials for cement manufacture. Continued use of Irish raw materials for these essential components of construction depends on this continuity.

The Bill also deals with two other issues which I have taken this opportunity to address. I have talked so far about State-owned mineral rights. However, a significant proportion of the mineral resources of the State is in private ownership. The working of these minerals is provided for in the Minerals Development Act, 1979, which vested in the Minister with responsibility for mining the exclusive right to work all minerals, with very few exceptions, and the right to license private individuals or companies to work those minerals, subject to a right to compensation to the owners of the minerals.

The purpose of the 1979 Act was to enable privately owned minerals to be developed efficiently, in the interests of both the developer and the State. It also gave a greater degree of certainty to exploration companies that they would be able to bring their discoveries into production even if these proved not to be State owned minerals. The constitutional rights of mineral owners were protected by the right to compensation to be paid at the time that any minerals are actually worked.

Section 20 of the Act conferred this right to compensation on the person who had an estate or interest in the minerals on 20 June 1979. It also provided that this right could devolve and be disposed of. In other words, it separated the right to compensation from the ownership of the minerals. As a result, the normal transaction of selling the full title to a parcel of land which also carried with it the minerals ownership would not include the right to compensation. Most buyers and sellers of land are not aware of this situation since they are mainly concerned with the surface rights and not with the abstruse position underground about minerals which may or may not have any value.

This situation greatly and unduly complicates and delays dealing with these minerals when I wish to grant a State mining licence. The 1979 Act procedures include giving extensive public notice of my intention to permit the working of the minerals and direct notice to anyone who may appear to me to have an interest. This is to allow individuals an opportunity to establish their ownership of the minerals. However, the person entitled to the compensation today is not necessarily the owner of either the minerals or the land, can be extremely difficult to identify and may possibly be unaware of his or her entitlement. If nothing is done, the position will only become more difficult as the years pass.

Section 3 of the Bill 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 shall transfer automatically also. This, in effect, means that the right of compensation shall 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.

Section 4 of the Bill deals with prosecutions for summary offences under the Minerals Development Acts. As the law stands, the Director of Public Prosecutions must bring all prosecutions for a number of specified summary offences under the Minerals Development Acts, 1940 to 1995, because the Acts make no provision for who may prosecute. This situation is unsatisfactory as it would involve the Director of Public Prosecutions in prosecuting relatively minor offences in the District Court which, in the interests of administrative efficiency, would be better pursued by the Minister or by the Mining Board, as appropriate. This is a simple technical amendment with a consequent provision in section 5 relating to expenses in bringing such cases.

I am introducing this Bill to deal with these matters now rather than wait for completion of a fundamental review of minerals policy and regulatory practice which is under way in my Department. This process started with the national minerals policy review group's examination of the industry in 1994. That group presented its report in April 1995. It had many valid points to make and a large range of recommendations, some of which have already been implemented. The group's report is 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 still have been overtaken by changing circumstances both fiscal and industrial.

I intend to bring forward more detailed legislative proposals within the next year which will address, in a reasoned way, many of the issues and outstanding recommendations contained in the national minerals policy review group's report. However, there are many other issues which my Department has been examining in the light of recent operational experience. I hope that this process will result in a clear set of legislative proposals which will ensure an ordered and sensible approach to development of our nation's mineral resources into the next millennium.

The Bill, when enacted, will clarify the position with regard to minerals clearly in public ownership but technically not vested in the State. Its principal purpose is to enable me to fulfil the commitment I gave to the developers at the Lisheen mine in Tipperary, a fine example of a modern mine development using best available technology. I granted a lease to the companies concerned following a rigorous examination by my Department of their development plan and environmental impact statement. The project also required, and achieved, planning permission and an integrated pollution control licence from the Environmental Protection Agency. It is worth noting that the EPA was the first in the European Union to grant such a licence for a mine. The degree of public access to these permitting processes ensures that successful projects are designed to the highest environmental standards. People come from all over the world to see the Lisheen mine which is one of the most modern designs of mining available taking into consideration pollution control requirements and EPA safety standards. When fully operational, the mine will have an output of 1.5 million tonnes per annum and will provide direct employment for over 300 people. In addition, the spending power of the mine and its employees will support the local economy and indirectly generate further employment. Production of zinc and lead concentrates is due to commence by the end of this year.

We also have a significant zinc and lead mine at Galmoy in neighbouring County Kilkenny which is now in full production and providing employment for over 200 people. This was the first new base metal mine in Ireland since Tara 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. This is the largest zinc lead mine in Europe and the new licences will help to ensure it will continue in production for many years.

We have an important asset in our national mineral resources which should be developed in an environmentally responsible fashion for the mutual benefit of the nation and private investors. Numerous countries previously hostile to foreign countries developing their mineral resources are now actively seeking such investment. This has increased the competition between countries to persuade explorationists to invest their limited exploration budgets. Ireland has done well in attracting a good share of this exploration investment, due in no small measure to the success of Tara, Galmoy and Lisheen. Our geology holds out the possibility of further discoveries while 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.

Legislation and practices in the minerals sector must be kept up to date and relevant to the modern industry. As part of that process and to clarify the issues I have outlined, I recommend the Bill to the House.

Mr. Burke

I welcome the Minister to the House and congratulate him on this Bill. It is only right that the exploration of minerals be put on a proper footing. I am aware of the problems which have arisen on the disbandment of the Land Commission, the transferring of its functions to the Department of Agriculture and Food and the setting up of the Department of Marine and Natural Resources.

This highly technical Bill covers legislation dating back to 1900. The Minister is also to be congratulated on securing the minerals and assets for the State and, ultimately, that people will be properly protected. The Minister cited the following definition:

There has been much debate on mines and mining over the years, particularly in Mayo County Council. Ups and downs in mining led the council to change its county development plan on some unauthorised developments. When our minerals are protected, stringent regulations should also be put in place, not only on a mining operation but also on planning and so on. There were unauthorised developments on Croagh Patrick which cost the people and the ratepayers dearly. Several court cases followed whereby Mayo County Council had to compensate people and, therefore, lost money. The ratepayers had to pick up the tab. Tight regulations are needed on mining industries.

There should be local investment in mining areas. I saw a programme recently on the Galmoy area where the Minister rightly pointed out that 200 jobs were created in the mine. By any standards, that is major employment in a rural area but there is very little investment. The State, which should be getting a slice of the cake, should invest in roads, schools, jobs and infrastructure in mining areas where large sums of money are being made. I ask the Minister to take cognisance of that and, in plans for future mines, the Department, the Government and the mining industry should ensure there will be locally based industries and that the infrastructure of those areas will be upgraded.

I also want to bring to the Minister's attention the conflicting views about the large gas find off the coast of Achill in County Mayo. In a reply to Deputy Kenny in the other House some weeks ago the Minister said that approximately one trillion cubic feet of gas was found. Yet the Sunday Independent of 25 March put the figure at 5 trillion cubic feet. That is a huge difference. It seems the gas on the west coast will be taken by pipeline to either Achill or Belmullet, to the interconnector on the east coast and then to the world gas network without any benefit to the local community or the country. This is borne out by the exploration licences granted by one of the Minister's predecessors, Mr. Ray Burke.

There are 2,250 square mile blocks of gas in the Atlantic margin. The State seems to have handed away the rights to gas in this area which stretches from Ireland to Norway. A find of five trillion cubic feet of gas is magnificent by any standards. It is bigger than the find off Kinsale, County Cork. I ask the Minister to explain the Government's position in relation to this find off the Achill coast and what guarantees will be put in place for the people of Achill and County Mayo. The pipeline from the west to the east coast will have to be built by An Bord Gáis and the taxpayers will have to pay for it.

County Mayo has been given Objective One status. A recent report compiled by Bord Iascaigh Mhara for the Minister entitled, "BIM Seafood Industry Agency 2000-2006", shows the deprivation score for Ireland. Counties Mayo and Donegal and most parts of west county Galway are included. Castlebar is given a score of one to two but the rest of the county is given a score of nine to ten.

I ask the Minister to explain how the biggest gas find in the world will benefit Achill, Belmullet and County Mayo generally and the Government's future plans. We have seen what happened in Scotland and Norway. The Norwegian Government ploughed back some of the money it made from gas finds in the region into local areas. Some 40,000 jobs were created in Scotland ,which was a huge investment in the area. We are not looking for 40,000 jobs along the west coast but we will not be happy if gas flows into and out of a county, which is already deprived, without any benefit.

The Government should take steps to invest heavily in this area and to avail of the rewards which will be reaped by companies to improve roads, schools, jobs, etc. There is five trillion cubic feet of gas on our doorstep, yet the Government has no plans to plough any money into the area. No contact has been made with the local authority. I ask the Minister to contact Mayo County Council to ascertain what role it can play in ploughing funds into this deprived area which depends on tourism. The report I mentioned supports the view that there is deprivation in the area.

In introducing this technical Bill, the Minister has taken steps to safeguard our exploration stocks and the rights of the people for generations to come. I ask him to put similar structures in place so that money generated from this magnificent gas find will be ploughed back into the local community to improve roads and schools.

I ask the Minister to clarify the up-to-date position on the gas find off Achill, the plans the Government has for it, what restrictions may be put on companies involved in this gas find, what safeguards will be put in place and if the Government intends to buy back some of the leases which have been sold.

Mr. Bonner

Ba mhaith liom fáilte a chur roimh an Aire. This Bill deals with minerals underground in the State which are one of our main natural resources. I refer to another natural resource, which is also the Minister's responsibility, the marine and fishing industries. I thank the Minister for revising the terms of the licences granted under the 1991 special white fish scheme. There were five vessels in County Donegal issued with these licences. Heretofore, they were allowed to fish in area six for non-quota species. They will now be able to fish in their traditional fishing grounds for all species, including quota species.

I know the Minister will not be perturbed by the unfair criticism made by Mr. Murrin, chief executive of Killybegs Fishermen's Association, who over-exaggerated the facts. This is understandable, particularly as he continues to represent a certain section of the industry in which he has a vested interest, and refuses to consider the industry as a whole and the employment it creates in west Donegal. However, I agree with his comments in the past few days with regard to the anger and frustration experienced by our fishermen following the closure of the blue whiting fisheries last week. Unfortunately, it is the Irish fishing fleet which must suffer due to the mandatory obligations under EU law.

The EU total allowable catch conditions should ensure that if the fishery is closed for one it is closed for all. I appreciate the Minister moved immediately to have Community law enforced equally for all states. I note, however, that Com missioner Bonino has advised the Minister that all but one member state has closed the fishery to its vessels. This is one state too many.

The Irish fishing industry is in favour of conservation and management of the quotas. However, it always appears that our fishermen must operate within the law. Our fishermen are miles away from playing on a level playing pitch. We need inspectors on board the large foreign trawlers, especially the Dutch and Norwegian, to stamp out the practice of dumping at sea. We need a major overhaul of the CFP to give us a fair share of the Community's fishing rights. We do not want the quotas of blue whiting based on historical figures. The Department and BIM are encouraging vessel owners and production factories to develop the blue whiting industry. When a serious effort was made in 1999, its answer was to close the fishery.

There is great anger among those in the industry, the primary producers – the fishermen – and the processing industry as it is going through a difficult year with markets. Killybegs and west County Donegal, in general, needs fish to survive economically.

I welcome this short and technical Bill. It will address possible deficiencies in existing legislation which could have a bearing on delaying the continued development of the nation's mineral resources. This amending legislation will clarify and rationalise a number of issues, it will greatly assist the continued development of our natural mineral resources and will have no significant implications for anyone.

The Bill has three main purposes. Section 2 deals with minerals acquired by the Irish Land Commission under various Acts. Section 3 amends section 20 of the Minerals Development Act, 1979. This will ensure that the rights to compensation for the working of privately owned minerals cannot be transferred separately from the ownership of such minerals. Section 4 empowers the Minister, or the Mining Board as appropriate, to prosecute summary offences under the Mineral Development Acts, 1940 to 1995, and will provide for expenses incurred in doing so.

The main purpose of the Bill is to address the question of mineral rights which were vested in the Irish Land Commission under a number of Acts, notably the Land Act, 1903, and the Congested Districts Board (Ireland) Acts.

A difficulty arose during the mineral title investigation for the Lisheen mine when it was established that certain categories of minerals were vested in the Irish Land Commission and not in a Minister or the State. The Minister has dealt comprehensively with the Bill and I do not propose to dwell on it in detail. I welcome the change in legislation introduced in the Bill as mining exploration may have an important impact on the economy in the future.

When addressing senior management in his Department last year, the Minister said it was his intention that the Department should work to develop not only marine resources but all other natural resources. His Department's responsibility now extends to include forestry and mining. The development of both resources can create significant potential for job creation. Mining and exploration, quarrying and linked industries provide employment for over 8,000 people. Mineral production and processing output in 1996 contributed £680 million to the economy. When the new mines at Galmoy and Lisheen are in full production, lead and zinc production will be doubled. This will place Ireland among the world's largest producers of these minerals. The growth in Irish mining activity will be a foundation for Irish suppliers and service providers on which to build export opportunities.

We have been a small but significant player in the international mining industry, particularly with regard to base metals such as zinc and lead. In 1988 Ireland was the eighth largest producer of zinc in the world. To date production has been solely based at Tara mines, Navan, which has been in operation since the 1970s and was expected to continue well into the next century, continuing to give employment. Major difficulties have arisen at Tara and the 600 strong workforce has been warned that production costs must be reduced if closure of the mine is to be averted. The plummeting value of zinc caused the problem at Tara mines – the price of concentrated zinc is $993 per tonne compared to $1,600 two years ago. Production costs at Navan are $1,150 per tonne compared with an industry norm of $1,003 per tonne.

The threatened closure of the mine forced drastic changes in production methods which significantly reduced costs from £21 per tonne to £19.08 per tonne. While redundancies were envisaged employment figures have increased. Further production costs of £3 per tonne are necessary to save the employment. Given current zinc prices industrial disputes could close the mine. On the other hand, the joint approach to tackling problems at Navan has resulted in considerable improvements in production. A strike or lock-out would seriously damage long-term relationships between the company and the workforce.

The Arcon mine at Galmoy, County Kilkenny, commenced production in 1997. The Lisheen mine in County Tipperary is under construction since September 1998 and is expected to commence production by October 1999. This will be Ireland's largest mine for over 20 years. It is jointly owned by Ivernia West and a foreign company, Minorco. The cost of bringing the Lisheen mine into production is expected to reach $280 million, an increase of 14.1 per cent over the previous estimate, as a result of extra costs in tackling serious water problems. It is hoped that cost reductions can be made elsewhere in the construction.

The company will be mining ore during the summer to stockpile for the start of processing in October. Over 250,000 tonnes of ore will be mined and 30,000 tonnes of concentrates will be shipped by the end of the year. Lisheen will reach full production a year later when it is expected to reach its target of 320,000 tonnes of zinc and 50,000 tonnes of lead concentrate per annum.

The project will provide long-term employment for 300 people, having provided 600-700 jobs during construction. In addition to the effect on the local economy from wages and salaries during construction, approximately £40 million will be spent during the construction phase. The mines' earnings will be used to purchase goods and services here.

The Lisheen mine and the recently opened Galmoy mine in County Kilkenny will help to focus international attention on Ireland's potential as a major base metal source. The output from Lisheen, combined with Tara and Galmoy, will place us among the world's largest producers of zinc and lead. The State will benefit from royalties in the State-owned Lisheen minerals payable at a rate of 4.5 per cent of revenue, amounting to over £35 million over the lifetime of the mine. There will be positive economic impacts arising from the project in terms of a significant contribution to GNP, the balance of payments and direct and indirect taxation.

The Lisheen project has undergone rigorous investigation and analysis in the planning stages, including a detailed environmental impact study. The Department will monitor the operation of the mine on an ongoing basis in conjunction with other authorities. This will ensure that all construction related to mining activity will be carried out in keeping with the best international environmental and engineering standards.

As well as the production of zinc and lead, there has been significant production of gypsum. Employment in the minerals industry, including exploration mining, totals approximately 1,000. Tax receipts to the Exchequer under the Minerals Development Acts, 1940 to 1995, amounted to £1 million in 1998. This comes from royalties, rents and fees for prospecting licences. The figure will increase significantly when Lisheen reaches full production.

I am optimistic that further discoveries, particularly zinc and lead, will be made. Despite the fact that mining companies have been forced to cut back on their exploration budgets due to the reduced demand for raw materials and oversupply leading to low prices, many new companies have been attracted to Ireland to carry out exploration. At present, over 400 prospecting licences are held in Ireland. While the main explorations focus on zinc, significant exploration for gold is also being carried out.

There has been much media speculation that Cambridge Mineral Resources plc may have found gem stones in the Inishowen area of County Donegal. Inishowen could see a diamond rush in the near future following the discovery of significant amounts of minerals indicating precious stones in a stream in the east of the peninsula in the Malin/Culdaff areas. The English based mining company surveying for precious stones in Ireland for the last two years saw the value of their shares rise by 60 per cent in the past week. Cambridge Mineral Resources released a press statement on foot of the share surge. The company stated that it had more than a sporting chance on this one but the risk still remains high.

Test results released by the company last week showed a level of chemicals and minerals in sediment samples from the stream which would normally indicate the presence of diamonds. The company declined to identify the stream from which samples were taken but said the presence of these minerals was a positive indicator. It added that it was throwing everything it had at the project. An aerial survey of the area is to be carried out next month on the advice of a major diamond company and an application is currently being processed by the Department of the Marine and Natural Resources. No difficulties are envisaged.

However, the company is still at the prospecting stage and there are no concrete indications of success so far. Apart from the six licences awarded to the company last year for diamond exploration in Donegal, the company also received licences to explore in other parts of the country. The only diamond ever reported to have been found in Ireland is said to have been discovered in the lands of Lord Brookborough in the middle 1800s. The diamond is reputed to have been made into a ring for Queen Victoria.

The excavation of mineral deposits can be controversial, but Cambridge Mineral Resources stated that there are no chemical problems associated with the extraction of diamonds. To date the people of Culdaff and surrounding areas have adopted a positive attitude. They have a good relationship with the company. This is in sharp contrast to the last time there was speculation in Donegal in relation to mining when Anglo United carried out exploration tests for uranium deposits in the Fintown area in 1978 and 1979. While there was much speculation at the time, no worthwhile deposits were found. Many speculators made significant gains on the stock market, but many others lost substantial savings after they purchased Anglo United shares. Those intending to invest in Cambridge Mineral Resources shares due to their recent spectacular increase in value should be reminded of the Anglo United debacle 20 years ago.

Mining exploration is not only a controversial subject; it can also be high risk. This was obvious from the exploration carried out in County Mayo by Glencar, to which Senator Burke referred. The most famous mine in Ireland is probably the former open cast mine at Silvermines in County Tipperary. It is worth noting that there is life after death. The biggest waste management company in the world is seeking permission to convert the disused mine in Silvermines to a massive landfill site which could serve up to nine counties.

The application to develop the former open cast mine will be lodged by Waste Management Ireland shortly. The facility, which would be the first in Ireland, is projected to cost £16 million when fully operational. It faces some opposition from locals who feel it could damage tourism. This problem arises in many places throughout the country and, unfortunately, most local authorities fail to address it in time.

It is important to note that among the main attractions for exploration companies when considering a country for investment are a stable political situation and a rational set of laws. For this reason it is important to address issues such as those covered by the Bill as soon as possible after they arise. I commend the Bill to the House.

Mr. Ryan

Cuirim fáilte roimh an Aire. Dúirt sé gur Bille an-teicniciúil é seo ach tá bunús leis a fiú a phlé.

I took a rapid look at the report of the national minerals policy review group. The Minister should avoid mentioning such matters because they remind me of issues I had forgotten and give me fuel for thought and reflection. I agree with the Minister that, surprisingly, the report is already out of date. One of its key recommendations is a 25 per cent corporation profits tax rate for mining, which was meant to be an incentive. However, all business will be subject to a standard tax of 12 per cent and I assume many of the complex and slightly pretentious economic analyses, such as the attempts at internal rates of return and net present values, are conditional on a 25 per cent corporation tax rate. Therefore, many of the report's assumptions about what is or is not attractive to overseas developers or investors are now dated.

Many other matters in the report appear to be influenced as much by ideology as reality. There is no particular need to eliminate the State's right under the 1979 Act to acquire free shares in any mineral development. There is no particular reason that the State should have or should not have to do so. I am not persuaded, in a regime of very low taxation for the sector, that there is any case for transferring royalties from turnover to profits. They are adequately rewarded from the point of view of profitability given the low level of taxation involved.

I am extremely concerned about many areas of activity in what is described and reported on extensively in the United States by mainstream media as corporate welfare. This includes an extraordinary array of hidden subsidies, unnecessary tax breaks which are not based on any need to attract mobile investment, uncommercial charges, etc. In the United States it is estimated that the cost to the state of such corporate welfare probably represents a fourfold multiple of the expenditure of the United States Government on social welfare. It is the biggest single area of public expenditure in real and taxation deferred terms. It is the judgment of independent analysts that if it was not deferred, it would be paid because of the excessive generosity of the tax break given. We must be extremely careful in this area.

The Minister asserted that Ireland's success in developing its mineral resources has created well paid employment. There is no disputing the fact that the exploitation or extraction of our mineral resources has created well paid employment. However, we should remember that it is moderately dangerous work and it is without any guarantee of life long employment because mines are by definition finite. Many people who work in mines will sooner or later discover that their skills and, therefore, they themselves are redundant. It is a reasonable corollary in the market economy that people who work in such places should be well paid. It would be unreasonable if they were not.

It is also unfashionable now to talk about the State having a role in mining. As far as I know, one of our mines is state-owned, but it is owned by the Finnish state through the Finnish state mining company. We should pursue our thinking on mining and minerals a bit further. Simply getting a mineral out of the ground and transporting it to Dublin or Cork to ship it out of the country is not the most efficient or beneficial way for the State to develop mines or to utilise and obtain the best value from our mineral resources, by anybody's definition. It is like saying that encouraging many foreign fishermen to catch our fish suggests we are developing our fishing industry. We must do more than simply extract the resource and ship it unprocessed.

When the Minister discussed the issue of fishing in the House, he mentioned the disappointingly low level of added value attributable to fish processing in this country. The level of added value attributable to mineral development must be close to zero as in most cases we ship it out in a relatively unprocessed, unrefined and crude form. It is a peculiar contradiction that we are exporting unprocessed lead and zinc resources and importing vast quantities of bauxite to be processed by Aughinish Alumina. A considerable part of the rationale for these strange operations is to do with multinationals and the strange ways in which they charge prices to each other and transfer pricing.

I do not wish to return to silly 1970s left-wing talk of nationalising the mines. My argument has nothing to do with that and it would not make any difference. All we have managed to do with our minerals over the past 30 to 40 years, since Tynagh was first identified as a major lead and zinc mine, is to dig them up and ship them out. After 40 years, one might have hoped we would have advanced a little.

We have done so in one respect. The Minister mentioned that we have advanced greatly in terms of our environmental concerns about mining. The Minister identified Lisheen mine as a model of how to do the job. I have not seen the Environmental Protection Agency in operation but I have considerable respect for it. However, I never understood why, if the minerals were to shipped from the Tivoli docks in Cork and a rail line passes the destination directly, it was not insisted that the ore be moved by rail rather than imposing on the citizens of Tivoli 30 or 40 large trucks a day rumbling in and out on the dual carriage way. It is a fairly well populated area. I have never understood why the already over-stretched roads were left to carry the burden when there is a perfectly good rail link to Lisheen. If investment is needed in the rail link to make it more manageable the company that will make the money could pay for it. Otherwise we would be back to what I described as corporate welfare.

The reason I refer to what we do with our resources is that it is linked to the fact that one of our mines, Tara, is under the control of a Finnish state corporation. In that country they appear to do things differently. Spectacular evidence of their capacity to do things differently and successfully is their ownership of the world's most successful mobile phone manufacturing company, Nokia. Finland has a population of 5 million and it is more peripheral than Ireland in terms of potential market places, given the United States is the single biggest market. We should have a good look at the way it does things.

To refer to Senator Burke's earlier statement on gas finds off the west coast, we need to consider various models and contrast the way Norway has developed its North Sea resources with the way in which the United Kingdom has done so. Norway has changed itself from a moderately rich to an extremely rich and very independent country. It has used those resources efficiently to build infrastructure and other things that will outlast the end of the North Sea oil and gas resources. Many people would argue the United Kingdom took a different route and will have nothing left except the holes in the bottom of the North Sea when its share of those resources runs out. Alternative models are available and we should be careful not to let the fashionable ideology blind us to that fact.

It appears – and I am happy to be guided on this – that the sensible rectification of the anomaly in the 1979 Act will not apply retrospectively. We will still have a 20 year gap in relation to which complex inquiries will have to be made regarding who should be compensated if the State gives a mining licence to exploit privately owned minerals because ownership of the land may be in one person's hands but someone else could own the right to compensation, as the Minister explained. The trouble with no attempt being made to deal with this is, as the Minister said, that over time the complexities will get worse. The complexities of the anomaly that has existed for the past 20 years will also worsen as time moves on if we do not make some effort to register or identify those who are currently eligible for compensation.

This seems an area where the State could be usefully pro-active, not to subsidise the corporate sector because we have more than enough corporate welfare in the State already, but to achieve some certainty and to identify the people before it becomes more difficult. We do not want people in 50 years time to have to search to find who owned land where a large mineral resource has been identified. We can do it now and sort out the issue. It should be possible to find out fairly easily and record who owned land in 1979. We should be able to sort out once and for all to whom compensation should be paid.

The Bill is welcome but I look forward to a comprehensive statement on minerals policy. Minerals policy should not simply be that of digging minerals out of the ground and exporting them unprocessed. For years the more rigid branches of the left in this country were keen on a State smelter. I suspect they have now moved to being keen on environmental issues and, therefore, probably do not want a smelter. Nevertheless, one would like to hear and one would expect in a fundamental reappraisal of State mineral policy that we would look at what is being done in other countries, assuming the fundamental objective is to get the maximum economic benefit from a mineral resource our parents did not believe existed.

We should consider a partnership arrangement which would perhaps involve processing outside this country and links with industries in this country. I do not want to push the analogy too far but we have singularly failed to develop the fishing industry in the same way as Norway and Iceland. I regret that we may similarly extract large amounts of mineral wealth from our ground but not get the real benefit which could be obtained from the proper development of an industry around this. I am not suggesting gargantuan eastern European-style State enterprises, but there must be possibilities for getting more from these resources than simply digging them out of the ground, which is environmentally acceptable, and shipping them out of the country to be processed elsewhere. This is not logical. I ask the Minister to reflect on this and not describe the policy of successfully digging holes in the ground and extracting mineral resources as a minerals policy.

I commend the Minister's policy on the national minerals policy review group. A number of circumstances, including our prosperity, have changed spectacularly since the report was published. This needs to be considered carefully and cautiously.

Mr. Farrell

Fáilte roimh an Aire agus roimh an mBille seo. This is a technical Bill which will consolidate a number of Bills that have been in existence since the setting up of the Land Commission. Ireland has changed much since then. I congratulate the Minister on the work he has done on behalf of fishermen since his appointment as Minister for the Marine and Natural Resources. He has the full confidence of fishermen at present.

Mining, on the one hand, can sometimes be a dirty word but, on the other, it can be a very good employer. When the Navan mines were opened they provided work for many people from around Ireland. Many people said at the time that the mines would destroy the countryside and the environment. Thank God this has not happened because there is a close relationship between planning, development and mining. I hope the system whereby the three processes work hand-in-hand continues in order to ensure we obtain the maximum from our natural resources while at the same time disposing of unsightly holes or unfilled quarries. Recently planning permission was granted for all unsightly refuse to be disposed of and unnecessary holes to be refilled and landscaped.

Under the legislation, will anyone opening gravel or sand pits have to apply for a licence? Will this be regarded as a mineral or just a building material for the extraction of which planning permission will be needed from the relevant local authority? It would be a pity if this type of development were included under the heading "minerals" because many farmers open sand and gravel pits on their land for building purposes. It would cause a lot of difficulty if people had to apply for a mining licence.

I hope the legislation relates strictly to valuable mining minerals that can be exported. I remember resolutions being tabled by the far left at many local authority meetings that there should be a smelter plant in the country. I believe that if anyone tried to set up a smelter plant today, the same people who advocated it then would be out with flags protesting against it. This is the way in which people approach different issues at different times.

I welcome the Bill which will consolidate a lot of legislation that has been in existence since the Land Commission was set up. The Land Commission did a great job by consolidating many small holdings. It took over and divided land and estates and gave a good living to many small farmers who could not have continued to exist but for the increase in their holdings. While it did a good job at the time, this is no longer necessary today. I welcome the Bill which I am sure will have the support of all Members of the House.

Mr. Caffrey

I welcome the Minister to the House and congratulate him and the Department on uncovering this legal loophole which has existed since 1903 and on seeking to remove the anomaly by way of an Act of the Oireachtas. It is amazing that it has taken so long to unearth this legal loophole. I worry that other legal minefields may remain. In 1959 the then Department of Industry and Commerce granted an exploration licence for the entire country to a company called Ambassador, a subsidiary of an American company, for the princely sum of £500. At the time Ambassador had a surfeit of riches and land and could not deal with this work. Over the years they farmed out the work to different exploration companies and there are now a multitude of exploration companies in operation. I hope there are no other legal minefields because we want to discover real mines with real potential. If one draws a diagonal line from Galway to Monaghan on the map of Ireland, one will find there is absolutely nothing in Connacht in terms of mineral deposits. There was one coalmine in Arigna which no longer exists. There is nothing in Dublin either. The fact that the west has no natural resources is, perhaps, something it has in common with Dublin. From a geological standpoint, the west has been disadvantaged in this area as well as in others. I hope the potential discovery off Achill will change this. As of now, I do not think the company has confirmed officially the deposit find off Achill Head and I would like the Minister to say what the official thinking is. Efforts are being made to determine the viability of the potential gas find off Achill Island. If that came to fruition, it would open up new horizons in the industrial field for Connacht and the north-west. It cannot pass through that hinterland without spin-off effects comprising major industrial and downstream development which we cannot envisage at present. I am sure the Department is aware of these potential developments and will consider them.

Base metals have been mined in this country for generations. On Mount Gabriel in west Cork, copper sulphides were being extracted from the red sandstone in prehistoric times. The walls of the small mines are still affected by the fibres used in the cooling water. Those fibres were C14 carbon dated and found to be 3,200 years old. People were engaged in mining in west Cork 3,200 years ago, although I am sure they were not interested in technicalities such as those of the Mining Development Bill.

At the present rate of demand, world reserves of lead and zinc will be exhausted in two to three decades. Senator Bonner referred to the falling price of lead and zinc. It is artificially low and when the cycle changes again, prices will go through the roof because it is a finite resource which will not last more than 30 years, according to experts in the field. It is a dwindling resource for which further exploration is needed.

Connacht is barren in terms of base metals as far as we know but there are industrial minerals of other types which could be exploited. An attempt was made to mine in Ballisodare some years ago but for economic reasons it was abandoned.

There are hundreds of small mines which dis appeared when the end of their life span was reached. That open cast mining left a serious legacy. Tynagh Mines in Galway is an example. It closed some years ago but, as a result of bad mining practice and low level technology, there is now an ugly scar on the landscape. That left a scar in the public perception of mining in terms of a clean industry. That is why there is such public antipathy to the idea of mining.

Senator Burke referred to the problems in County Mayo, where the county development plan was changed and a blanket ban on mining in the entire county was imposed. That decision led us to the High Court. I was one of the six councillors who voted against the imposition of the blanket ban because I felt it was contrary to the development of the county – any potential for the county was needed. Mayo County Council was, luckily, vindicated in the High Court and the mining company lost the case. That decision was motivated by the public perception within the scenic Westport area that mining is a dirty business which could destroy the landscape and environment.

During that process, however, we went to inspect several state of the art mining operations in this State and abroad. We found that with modern equipment and technology there is no great environmental damage. The tailing ponds and such ancillary matters which go along with mining were properly monitored and there was no adverse effect on the environment or leaching into the surrounding land. This was borne out by the visits we made. It is unfortunate, therefore, that this legacy in relation to mining exists. It will be hard to shift the public perception. Even now when you mention mining in certain areas, it does not go down well.

The Minister is to be complimented on introducing this Bill. It is of necessity limited in its scope. It deals with technicalities and legalises a situation which arose inadvertently over the years without anyone being aware.

There are many industrial deposits scattered throughout the State, although they may not be as valuable as the base metals. There is gypsum, aggregate, stone and vast deposits of gravel. With the present boom in the construction trade, those deposits are rapidly running out in some places. I have seen sand and gravel being transported 40 miles in my area. I spoke to the owner of a major sand and gravel operation who is extremely worried that deposits are fast diminishing. There are no other areas to which he can go in the immediate vicinity. If momentum is to be maintained in the building industry, it is vital that local authorities do not impose planning restrictions on sand and gravel operators as a result of the legacy of bad practice and unsightly excavations. If those issues are dealt with in the new raft of legislation these problems will not arise as frequently in the future. A major operation in Mayo has been seeking planning permission for the past 12 months for a sand, gravel and cement facility which, with a little over 200 jobs, would give much needed employment in the area. It is being blocked on fairly tenuous grounds by objectors.

Many issues remain to be dealt with in the mining area and I hope we will not be back here at some stage in the future trying to regularise other loopholes that have suddenly appeared, particularly affecting the mining industry.

Mr. Walsh

Ba mhaith liom fáilte a chur roimh an Aire agus roimh an mBille freisin. Bille an-tábhachtach atá ós ár gcomhair tráthnóna.

I welcome the Minister to the House. As stated by other speakers, he faces some of the most onerous challenges of any Minister, with responsibility for fisheries, natural resources and mineral development. During the history of our State, investment in developing agriculture and general manufacturing industries was to the forefront of Government policy. I compliment the Minister, Deputy Woods on putting the development of our fishing and minerals industries centre stage. That is long overdue. Our natural resources are sustainable industries if we can generate investment and create an interest in developing them.

The Minister should be complimented on the Bill. He is ensuring the same attention to detail in his current responsibilities as he did when he was Minister for Social Welfare. He initiated much good work in that Department and that is reflected in our excellent social welfare system. He laid the foundations for many of the improvements in that Department during his tenure and his legacy in the Department of the Marine and Nature Resources will be excellent also.

Our mineral industry is in its infancy but it has great potential. Tara Mines has been operating for many years, as have Gypsum and others. Recently we have seen the development at Galmoy and the construction work now taking place on the mine at Lisheen. Senator Burke referred to the benefit to the general Galmoy area as portrayed in the recent television programme, but it is an achievement for a small rural area to have created approximately 200 good quality jobs. While the spin-off benefit in that area might not accrue to the immediate villages, places like Rathdowney and Kilkenny have benefited from that development. It is fair to say these mines have been developed without any State grants. Much of our industrial development has been predicated on attractive corporation tax rates and also on significant grant aid to overseas industrialists coming here. That policy has paid dividends in the national interest but these developments have benefited from a high level of investment – the investment in Galmoy was in the order of £80 million and it was probably twice that figure in Lisheen. Considerable expenditure is being incurred and the benefits will accrue to those areas over the next two or three decades. The projected lifespan for the ore extraction is 13, 14 or 15 years although experience elsewhere has shown that as new deposits and reserves are discovered, that figure will be significantly increased.

The Bill seeks to regulate a deficiency that existed with regard to the Irish Land Commission and the vesting of the ownership of the rights in the State. I concur with Senator Farrell's comments on the Irish Land Commission. Its policies made a pivotal contribution to sustaining development on the land by enabling small farmers to increase their holdings to at least a viable unit. The work done by the Irish Land Commission should not go unrecognised but in this instance it is important that the rights of the mining companies, which have made such a huge investment, be protected so that they can realise a return on their investment.

The Bill also seeks to address the right to compensation for the working of the privately owned minerals and the transfer of the ownership of such minerals. The Bill rectifies the position. Perhaps the Minister might give some consideration to developing a database which can be accessed by international mining companies. In that way others might be encouraged to follow the investment made by Arcon, which is an Irish-owned company, and Minorco at Lisheen. Ivernia West, another Irish company, is a 50 per cent stakeholder. It is good to see Irish entrepreneurs putting their money into developing our natural resources. If we can increase the current level of investment, the country as a whole will benefit. A database might assist that process.

On the question of ensuring that the mining rights are not transferred from the ownership of the minerals, a system might be considered whereby the royalties are negotiated with the State by the mining company. That would not give rise to a situation whereby the mining company would have to begin negotiating with the landowners involved. The Mining Board has some role to play in this area but it is a suggestion that might be considered in terms of simplifying the system. Once the original negotiations are completed, that would be the extent of the royalties extracted from the mining company. Perhaps the mining company would then play a part in deciding how any such royalties would be appropriated, should that be necessary, with other interested parties. That type of clarity would create a climate which would make it more attractive for investment.

Significant investment has to be made in developing a mine and there is a reasonably long lead-back time in getting a return on that investment. As Senator Caffrey said, the volatility of the commodity market means it is not an entirely predictable return when once examines the fluctuating prices of lead and zinc on the international market. We must be mindful also of other countries such as China which is developing its own natural resources sector. It can have a significant impact on the marketplace if large quantities are available to the smelting companies at lower prices as a result of cheaper labour and other costs in these developing countries. I welcome the Bill which must be enacted to allow for proper regulation of the system. I hope future debates will take place in the context of significant increases in our mining capacity creating additional employment and Exchequer returns.

Mr. T. Fitzgerald

I welcome the Minister and thank him and the Department for initiating this Bill in the Seanad. It is important to initiate Bills in the House. I know little about mining and would be more at home if the Minister was in the House addressing marine matters. However, in allocating moneys to the fishing industry in County Donegal, the Minister should keep Senator Bonner's admission in mind that "there are diamonds in them there hills". There may be other minerals in those hills and County Donegal may be receiving enough resources.

The Bill makes provisions relating to a particular mine in County Tipperary and further legislation will be required concerning the industry. There are times when I regret that the Land Commission is not still in existence as it would be a valuable asset. One of the mines in County Tipperary to which the Minister referred is the largest lead and zinc mine in Europe. I was surprised at the employment levels generated in a rural area by such industries which are a great asset.

The Minister has taken great strides to increase added value in the fishing industry. I agree with Senator Ryan's comments concerning the export of mined material without any added value or processing. There may be reasons for this. Some years ago a boat yard in Dingle needed particular lengths of oak for keels and planking which could only be sourced in Wicklow. However, the wood had to be exported first because the licence for felling trees in Wicklow was for export only. The wood was cut in a sawmill in England, imported and remained in Dublin docks for six weeks so that the Department for Agriculture could ensure that it did not contain diseases which were being brought into the country. It would be crazy if mined material was exported only to be imported again – that makes no sense.

I wish to inform the House that there is agreement to take all Stages of the Bill today. I will ask the House for its agreement on completion of Second Stage. I commend the Bill.

Minister for the Marine and Natural Resources (Dr. Woods)

This has been an interesting debate and I take on board the points made by Senators. I share Senator Ryan's concerns about the value of these materials to the State. We must first allow people to carry out the exploration which involves much investment. The Senator pointed out that people do not like smelters. The feasi bility of opening a smelter has been examined on a number of occasions. However, environmental issues aside, the outcome of those examinations was not helpful. I am conscious of this issue, perhaps because of my time in the Departments of Health and Social Welfare.

The Bill was welcomed by all Senators. Senator Burke was particularly interested in the potential gas find off Achill. Different figures have been mentioned with regard to the potential size of the find. The Senator referred to a report which highlighted areas of deprivation and indicated particular problems in Mayo. I agree with the Senator that as much of this gas as possible should come home to light up the west.

We must first consider the technicalities of what is called the "prospectivity" of the find – how real the prospect is and how much gas might be produced in the long-term. The indications are that this is a major find but this remains to be tested. One successful exploration well produced 63 million cubic feet of gas per day – one of the highest flow rates in the North Sea area. I went to see this well. A two-inch choke was used and the technical experts stated that 100 million cubic feet could be produced per day if a larger choke was used. This would be the highest rate of flow recorded.

However, we still must ascertain the extent of the find. The gas flowed at a very high pressure which would seem to indicate that there is a large amount present. However, it could also indicate that there is a lot of gas in a small area. These issues must be resolved but the indications are good. Officials in the Department would agree with this analysis. Naturally they are slow to give their imprimatur because one is dealing with shares and investment and we must be cautious. One exploratory well has come up trumps. The seismic data on the area indicate it is a good field. Two more exploratory wells have to be established and if the results are favourable we will have a big find. Each exploratory well costs about £20 million, a substantial amount. However, the first one came in slightly below budget as the weather was right at the time. It is a difficult area, 60 or 70 miles out from Achill which can be subject to bad weather conditions.

Enterprise Oil is making arrangements to drill a second well this year and has issued tenders for services. In two to three years we should know definitively the size of the total find. Senator Burke said he read various estimates in the newspapers ranging from 1.3 trillion to 5 trillion cubic feet. One can lose oneself in those figures. However, indications are that this could be the biggest find since the Kinsale gas field; it could come close in size and eventually may exceed it.

I cannot give the exact development costs off the top of my head. Piping etc. could cost from £600 million. If it comes from the west coast, the west coast should benefit. There are major considerations as regards Bord Gáis and the interconnector and its cost. However, the west coast should benefit if there is a development. It is an Objective One region for very good reasons. The fishing industry can do a great deal to help. A gas field would be very valuable.

I cannot say much more than that at this stage. Senator Burke asked if local areas will benefit and what the Government's plans are. We will have to wait if there is a field. We will monitor the position and as soon as there is solid confirmation we can look at how to develop it. It looks good at the moment. We had good news last year with the confirmation of the well to which I referred.

Senator Bonner spoke about the vessels in area six which is on Donegal's doorstep. I wish to remove that anomaly and I thank the Senator for his comments. He also spoke about blue whiting. I moved quickly as regards that area and Mr. Murrin and I were on the same track; he was representing the KFA in that instance. Commissioner Bonino acted quickly and exerted pressure to ensure that all countries comply with EU regulations. One country has not complied and the Commission are pursuing that.

Tara Mines was mentioned by Senators Bonner and Ryan. The Finnish state mining company is now privately owned. I agree there is an onus on us to ensure that taxpayers and local communities get a return from these developments. One is always in a negotiating position and one needs to strike a balance. Senator Bonner spoke about Tara Mines and Lisheen. He pointed out that 600 to 700 people were employed during the construction phase at Lisheen and 300 are employed on a continuing basis.

He also mentioned the diamond rush in Inishowen – there will be a rush to purchase land there. Cambridge Mineral Resources plc is licensed to prospect for gem minerals in seven prospecting areas around County Donegal. A recent press release from the company announcing its intention to undertake airborne geophysical surveys over these areas attracted media interest for a short time and its shares rose substantially as a result. The airborne surveys will be subject to the approval of the Department and the application is being processed. No difficulties are envisaged. The company is still at the prospecting stage and there are no indications of success or otherwise. Senator Bonner spoke about the diamond found in the area which was presented to Queen Victoria and perhaps there is a prospect of some more.

Senator Ryan was correct when he said the minerals report was out of date. A number of its elements have been put into practice by this Department and others since. However, we must look at it in the context of today to see where we are going. Senator Ryan also mentioned the 12.5 per cent corporation profits tax. That still stands at 25 per cent for mining, which is a bone of con tention. A representation for a decrease was made by the mining industry in the last budget. The Senator said the added values for fish and minerals are too low. The added value for fish is about 15 per cent whereas one can get up to 200 per cent. There is a debate in the Dáil on this matter tomorrow. Our objective is to increase it through more processing, better handling and quality etc. I will bear the Senator's view in mind.

As regards the use of resources I will look at Norway. There is so much to do and so little time. I am very conscious of Norway, in terms of both fishing and resources. However, its circumstances are different as it is outside the European Union and can do many things we cannot. I am often criticised, although I am not saying that is what the Senator is doing—

Mr. Ryan

No, not for many years.

Dr. Woods

In regard to the question of retrospection, that is all right for those which come under the 1903 and 1923 Acts, which are State owned, but it cannot be done constitutionally for those which come under the 1979 Act. That is the advice of the Attorney General.

Senator Farrell does not want unsightly holes or unfilled quarries. Nowadays, as part of the modern approach – which Senator Ryan recognised – a substantial bond is required for finishing off and one cannot start to mine unless it is in place. The bond in the case of Lisheen is £9.5 million, which gives one an idea of the substantial amounts involved.

Senator Caffrey welcomed the removal of the anomaly and hoped that more legal loopholes will be removed, as do I. However, sometimes those loopholes are not found until one begins to do something specific.

Senator Fitzgerald and others referred to the work done by the Land Commission. Someone should write its history because they were very thorough people who really worked to protect the State's interest. It has arisen in many matters in which I have been involved that the steps taken by the commission were very visionary, at a time when people were not looking down the road. It protected the State's interest in that regard. For example, when the commission transferred land to people they got it down as far as ten feet, but the commission ensured what was below that level belonged to the State. That was very valuable when minerals were discovered later because it meant they belonged to the people. That was a long time ago and shows the wisdom which existed.

Senator Caffrey spoke about the gas potential off Achill, which I have explained reasonably well. I agree with him and I am very excited about it – although I am not allowed to be excited about it because one cannot affect the share price. Nevertheless, the factual situation is that the first well was very successful, in so far as it goes. It is hoped there will be another one this year, which leaves only one more to be defined in the whole area. That makes it all quite imminent.

Senator Caffrey referred to the sand and gravel deposits vanishing, which is an interesting and practical problem. That leads me into the issue of what we are doing with the seabed, although it is dangerous even to mention that one is looking at the seabed because 90 per cent of the Irish territory is under water. Modern technologies mean that one can now get down to and back from the seabed very easily and it has become a different ball game. The Marine Institute did a survey for us on the seabed, which has evoked a great deal of interest. We are considering going much further with that because of the number of resources under the seabed, including oil, gas, minerals, various gravels and aggregates. There is a problem in ensuring the fishing grounds are maintained but we are hoping to map out those grounds and find out more about them. I am co-operating with my colleague, the Minister of State, Deputy Jacob, and the Geological Survey of Ireland, which is still in the Department of Public Enterprise, in examining that whole question further. There are many interesting things happening, which seemed very far in the future some years ago but are now imminent. That is a very relevant issue in that area.

Senator Walsh said he hoped I would leave a good legacy. I was not planning to go yet but I also hope I leave a good legacy. He spoke about the spin off jobs, which too often are not calculated and taken into the equation. He highlighted the fact that industry gets grants and tax relief but mining does not. I will follow up the question he raised about the database. There is a great deal of data there now.

Senator Fitzgerald was envious of the gemstones in Donegal, which I dealt with while he was out of the Chamber. He also spoke of the need for more processing at home in the fishing industry. We are doing something about that at the moment.

The development of the Corrib gas field is coming at a time when the Kinsale gas field is expected to come to the end of its economic life. Some 1,340 billion cubic feet of gas has been produced from the Kinsale-Ballycotton gas field over the past 20 years, which has provided some 20 per cent of Ireland's energy needs and realised cumulative savings on our energy import bill of over £3 billion over the period. That gives Senators some idea of its impact. Nevertheless, all our oil and 30 per cent of our gas requirements are imported. The challenge now is to reduce our reliance on imported energy by further production at home.

Exploration activity in Ireland's offshore area remains at near record levels, with 25 exploration licences, each with significant work programmes, currently in place. The recent round, which finished at Christmas, did not receive a great deal of support, so there are many spare licences which are unallocated at this stage. This is an interesting area which is going well at the moment. We must be conscious of the return to the State and the people of these resources.

I thank Senators for their contributions. Nothing that was said was at variance with what I think. A great deal of development is needed in this area and I would like to progress it. I will listen to what is said by Senators in that regard.

Question put and agreed to.

Acting Chairman (Mr. Farrell)

When is it proposed to take Committee Stage?

Mr. T. Fitzgerald

I want to assure the House that we checked with the parties during the Order of Business to seek their agreement. Senator Ryan expressed reservations at the time and said we should wait to see how much time was available. He has now graciously agreed that Committee and Remaining Stages should be taken now. I ask for the agreement of the House to that.

Agreed to take remaining Stages today.

Seanad Éireann debate - Wednesday, 28 Apr 1999