I thank the Chair for this opportunity to raise this very important matter this evening and the Minister for taking the time to remain in this House to consider it. I would also like to take this opportunity to congratulate the Leas-Cheann Comhairle on his appointment and to wish the Minister well in his very important job. His two ministries are vitally concerned with the problems I have to outline this evening.
No mining operation can last forever because the resources reaped from the ground are not limitless. Unfortunately Mogul are coming to the end of what has been, for them and for everyone in North Tipperary, a benefit which has given great prosperity. The Silvermines operations are based a few miles outside Nenagh. That town has developed many businesses from the prosperity the mines have brought to the area which has made Nenagh a very successful town. The workforce in Mogul mines amounted to just over 500 — mainly male-dominated — coming from all parts of Tipperary. Their wages are in excess of £5 million per annum and have proved to be of great benefit to the area.
Within a very few miles of the Silvermines there is a very poor area, Sliabh Felim, part of which has been designated as a disadvantaged area under the EEC disadvantaged areas scheme. The existence of the Mogul operation for the past 15 years has been of tremendous benefit to this area. It is a sorry day for North Tipperary that that period of prosperity is coming to an end. I want to ask the Minister to try to extend the period of operation of the Mogul mines to ensure that we can obtain the maximum benefit from this natural resource and to allow us time to attract an alternative industry and ensure that the impact of the closure of Mogul mines will be softened as much as possible.
Everybody has known for several years that the Mogul mines operation had to come to an end. In 1978-79 there was great concern because the value of ore on the world market was at a new low. People were concerned that Mogul might not be able to continue in operation. Thankfully the price of ore rose and the immediate concern passed. In 1979 it was anticipated that the Mogul operation would continue for another four or five years and it was estimated that there was sufficient ore left in the ground to keep the business in operation for at least five years and possibly six or seven years. Now, three years later, because of the rise in energy costs the Mogul operation can no longer continue. I say it can no longer continue because it is a private enterprise that must make money if it is to continue in being. Unfortunately the imposition of increased electricity charges has forced the mine in the last year or two into a loss-making operation which the company feel they cannot tolerate. That is the problem we have to deal with tonight.
A few minutes ago the Minister said that action was needed. Whatever about the National Enterprise Agency or the National Development Corporation and the action he is about to provide for them, let me assure him that he is right: action is needed in relation to the problem I am outlining. Given the expressed commitment of the Government to maintain employment at its highest peak and ridding ourselves, in so far as we can, of unemployment, I have every confidence the Minister will commit himself to giving the kind of assistance I am asking to enable this company to continue in operation.
For the benefit of the House I want to indicate the type and extent of the operation we are talking about. The Silvermines operation is enormous, employing over 500 people. Each year salaries and wages amount to over £5 million. One can imagine the effect this money has on what is largely a rural community. The State is a great beneficiary. In 1980-81 the State received £1.4 million by way of income tax and PRSI contributions. CIE, our national transport company, in freight charges alone received £302,000 in 1981 and the local authority, of whom I am a member and who are always concerned about financial difficulties, in 1982 would stand to benefit by a sum in excess of £80,000 in rates. This operation is very important in an area which can be readily identified as having a declining population. I do not want to go into that point at the moment because we do not have the time.
The cost to the State in unemployment benefit in 1982-83 if the Mogul operation closes has been estimated at £5 million. The problem facing the people of North Tipperary was not the inevitable closure of the mines — we knew that was going to happen — but the people were shocked and horrified at the proximity of the closure date announced by Mogul. I regret having to say all this because Mogul have played an important part in the economic and social life of my constituency but the fact remains that they did not conduct themselves well when they announced on 4 February that the mines would not last longer than the end of July in any circumstances. The requirement under statute is to give two months' notice which means that the mines could be closed before the end of July. That sort of time scale is not sufficient for the IDA to do all they need to solve our problems nor is it sufficient for the Minister or the Government, to try to solve that problem.
I am particularly shocked that the board of Mogul gave that sort of notice in view of the fact that there were constant negotiations between public representatives, the county manager, the IDA and Mogul on an ongoing basis for the past few years. For example, on 4 February the county manager met representatives from the board of Mogul and he did not get any indication that an imminent closure was planned. On 26 February Mr. White, managing director of the IDA, met representatives of the company, six days before the announcement of the closure, but no indication was given that it was planned to close the mines next July at the latest.
In my view this company have given a lot to County Tipperary but they have also got a lot out of the county. They have made many millions of pounds profit from our rich natural resource but they have a responsibility to discharge and they have not done so. Having criticised Mogul, in fairness, I must compliment them. The redundancy payments for their workers have been extremely generous. The redundancy provisions they have made are over five times their statutory obligations. While I compliment them for that, I in no way accept that as discharging their responsibility to help to organise some sort of handover in employment to agencies like the IDA who have a massive job trying to find alternative positions to cushion the blow for the people in my constituency.
The IDA have been conscious of the difficulties which would arise by the closure of these mines. In their industrial plan published in 1978 they articulated the problems that would be faced in the North Tipperary region by the closure of the Silvermines which they regarded as a predominant consideration. Although the IDA have come nowhere near a situation which will ensure that the impact of this closure will be minimised to a significant extent, they have done a fair amount. They have been working hard to promote new industries in the region.
Having complimented the IDA I have a word of criticism also regarding what they have indicated in a recent press statement about what they have done. I do not know whether the Minister has seen the press release concerned but I assume he has the information. In that press release the IDA indicate, though they do not so state expressly, that 550 jobs have been provided as a result of promotion by them since 1978-79. Unfortunately, that is not the case. Very many of the industries listed in that press release pre-existed the IDA industrial plan for 1978-82. While they were grant-aided, some 300 of them pre-existed the plan. The fact is that the IDA have attracted five new industries into the Nenagh area in the past three or four years. These are industries in respect of which the IDA said that at full production there would be 711 jobs involved, whereas the outturn has been 211 jobs. One can see readily therefore that the work has not been done, that the IDA have not had sufficient time to minimise the impact of the closure of the mines. The reality is that not enough industry has been introduced to make an impact on the area. In these circumstances the IDA must be given a greater opportunity to fulfil their responsibilities, a responsibility that I am very confident they can fulfil. In order to promote the area it will be necessary to designate it. I am confident that the Minister will give them the resources they need but the critical factor is that of time. I am hoping that the IDA will be given the necessary time as a result of this discussion tonight.
The only alternative to the closure of the mines is the provision of additional jobs in the area and that is why the IDA must attract new industry to the region. In this way we will be ensuring that the £5 million that is available there by way of wages will not be lost but that cannot be done in the course of two or three months. The mining operation must be continued until the £1 million or more tons of ore are exploited and in that context we are talking about a period of 18 months. The company have lost money in the past year or two. Their biggest burden for this year is an ESB bill estimated at £2.3 million. I am asking the Minister to subsidise that energy bill so that the mine may continue in operation for at least 18 months after July next and in order to give the IDA a breathing space in which to get on with the job of attracting alternative industry to the area.
There are compelling arguments in favour of that subsidy. Although the company have been losing money the fact remains that there is a natural resource under the ground in the Silvermines and that the machinery for its extraction is available. As a general principle the Government should ensure that the ore is extracted because regardless of what price fluctuations there may be in the price of this mineral in the future it will never again be economical to mine it if we allow the machinery to be run down or sold.
The IDA have plans for the building of a 24,000 sq. ft. advance factory at Lisbonney. Planning permission is being applied for but there is no prospect of all that procedure being completed and the factory being built within a few months. The factory must be built in order to attract new industry to the area but we must give the IDA sufficient time. Another factor is the availability of talented fitters and other workers at the mine. These are people who could be employed in other industries but we must have these other industries first.
Another aspect of the matter is that the State would save about £5 million in 1982-83 in terms of unemployment benefit, pay-related benefits and so on. That is a strong argument for keeping the mine open for a further period. In addition, the State will gain about £1.14 million by way of PAYE returns and pay-related payments in that time while CIE will benefit to the tune of between £300,000 and £450,000 by the mine being kept open.
We are talking about a site in North Tipperary which has a tremendous infrastructural advantage. There is an unlimited water supply and an electricity supply which would cost a fortune to introduce into a new area. This makes it ideal for the introduction of another heavy industry but if it is not possible to attract such an industry the IDA must endeavour to bring in a number of industries to the site. Otherwise it will go to loss.
