andProinsias De Rossa asked the Minister for Energy the reason the State, as a 25 per cent shareholder, waived its rights to 3.3 million dollars interest on loans to Tara Mines.
10.
Ceisteanna—Questions. Oral Answers. - Tara Mines Investment.
9.
andProinsias De Rossa asked the Minister for Energy if he has any plans to increase the State's shareholding in Tara Mines now that the company have an established record as a profitable and experienced mining company.
The Minister for Energy and Tara Exploration and Development Company Ltd. waived their rights to accrued interest, amounting to £1,928,297 and £6,830,130 respectively by December 1981 on moneys owed to them by Tara Mines Ltd. The waiver will apply as long as any preference shares issued by the company remain unredeemed. This arrangement was one element of an agreement concluded in March 1982 to meet a critical financial situation in the company and safeguard the jobs of the workers concerned.
Under the agreement Tara Exploration and Development Company Ltd. also waived its right to guarantee fees — amounting to £5.575 million at 31 December 1981 — in respect of certain bank borrowings. In the circumstances of the "pressing financial needs of the company", as recorded in the agreement, the agreement also provided for an issue of preference shares by Tara Mines Ltd., for the demise of additional minerals to the company and for an extension of the term of its State mining lease.
A significant improvement in Tara Mines Ltd.'s financial situation began to develop towards the end of 1982 and it has been maintained since. This improvement is attributable to higher metal prices, a dollar/punt relationship favourable to the company, lower interest rates and increased production. That changes favourable to the company could develop rapidly and to the extent they have occurred in all these factors could not have been anticipated.
Only a limited number of preference shares have been issued by the company to date and in view of the company's improved financial situation the question of the necessity to issue further preference shares has been under review for some time.
There are no plans to increase the State's shareholding in Tara Mines Ltd. at the present time.
Would the Minister please repeat the figures quoted in the early part of his reply because I could not hear them? There was an amount of something like £1,900,000 and another figure quoted thereafter.
I shall repeat the relevant section:
The Minister for Energy and Tara Exploration and Development Company Ltd. waived their rights to accrued interest, amounting to £1,928,297 and £6,830,130 respectively by December 1981 on moneys owed to them by Tara Mines Ltd.
Now that Tara Mines have entered into a profitable situation in the past year because of an upturn in zinc and metal prices — incidentally, could the Minister explain why they could not have foreseen that if there was an increase in metal prices Tara Mines would have come into profit — is it the Minister's intention to seek payment of the £1,928,297 accrued interest due to the taxpayer?
We waived our right to collect that, as did Tara Exploration and Development Company Ltd. their rights in respect both of the interest and guarantee fees up to December 1981.
Surely the Minister did not just write off £2 million taxpayers' money because the company was in a loss situation, knowing that they could very quickly move into a profit-making situation if metal prices rose? Is the Minister not now in a position to claim for the taxpayer the money waived when the company was in a loss situation, because they are supposed to make a profit of £12 million this year?
We waived our right to collect interest in very pressing circumstances. Indeed, there was a real risk of the company then being put into receivership. I am sure the Deputy would not have liked to have seen the company put into receivership at that time with the consequent unemployment that would have arisen. At that time the company had encountered serious financial difficulties arising from poor trading results, exacerbated by a prolonged strike and the falling price of zinc. Therefore we acted in the best interests of the people employed there and in order to preserve the company intact. In such circumstances I am sure the Deputy will understand that one has to take the best possible action to ensure the company's continuation.
I am not familiar with the details of that agreement between the Government and Tara Exploration and Development Company Ltd. From recollection I think it must have been negotiated by my predecessor. Is there any intention on behalf of the Department or the Government at present to renege on that agreement, or to change any of its details? I presume it was a legally binding agreement.
The Deputy might know that the question of the possibility of a preference share issue was agreed initially in principle by the late Deputy George Colley when he was the Minister involved.
What was the date of the Government decision?
It was a legal and binding agreement which would have been negotiated in 1982.
On what date?
I think it was March 1982.
Was it before 9 March 1982?
I have not the exact date but it was a decision of the last Coalition Government in circumstances in which the relevant company was in crisis.
I know that.
We entered into that agreement. The position now is that we feel that the crisis has passed and that there is not a need for the company to issue preference shares, because in so doing they would dilute the State's interests. I would hope that the company would take congnisance of my wishes in this regard. We have been helpful to them over the years. We wanted the maintenance of good employment there. We wanted to see the ore body worked to the benefit of our economy. Our goodwill in this matter must be accepted by the House. In turn I would hope that Tara Exploration and Development Company Ltd. would recognise that there is not a need for the issue of the preference shares because of their changed financial circumstances and I would urge the company to accept my position as being one of reality.
I have no quarrel with the Minister in the manner in which he is looking after the interests of the State. But I asked the straight question: is there a commitment, under a legal agreement and has he any intention to renege on any agreement entered into which was legally binding?
Any legal and binding agreements into which my Department enter will always be kept.
Would the Minister assure the House that he would ensure, as he did at the time when the relevant company was not showing a trading profit, that the 1,000 jobs there, which are most important to the whole of County Meath, will be safeguarded?
The Deputy can be assured that we shall continue to do so. It was in the crisis situation prevailing in 1981 within the company that my Department entered into a series of agreements to ensure the viability of the company in future years. Obviously, we are pleased that the company is now working to full capacity, giving excellent employment to nearly 1,000 people and exploiting our natural resources to the maximum benefit of our people.
Would the Minister agree that, as well as having the function of protecting jobs and trying to get the company out of crisis, the Minister and the Government also have the function of protecting the taxpayers' money? Would not the same objective be achieved in getting the company out of crisis by deferring the payment of the £2 million interest until the company got back into profit rather than waiving the £2 million?
That seems to be argument.
That is the road we went in order to ensure that the company survived. I would now hope that the company would take full cognisance of my statement today with regard to the proposed issue of the preference shares. We have been very reasonable towards the company and they have a moral obligation to accept my Department's position. I am speaking on behalf of the people and trying to protect their interests. In those circumstances I hope that Tara Mines Limited and their principal will fully understand what I have said.
That seems to indicate that they have not a legal obligation.