Vol. 544 No. 4
65 Mr. Gilmore asked the Minister for the Marine and Natural Resources the discussions he has had with the owners of a company (details supplied) regarding their plans for the future of the mine and the ore base, having regard to their decision to lay off 700 workers; and if he will make a statement on the matter. [28912/01]
On the basis of a recent meeting with the company's management team, I am satisfied that they have a real commitment to reopening Tara Mines once it is clear that zinc prices are moving to satisfactory levels. They have also indicated a commitment to continue their minerals exploration programme in tandem with resumption of mining and to ensure the company's long-term involvement in exploration and mining in Ireland.
The company has told me that its parent company's long-term intention is to reduce its stake in base metals mining throughout the world. This is intended to allow it to reinvest part of its capital in other areas of technology. However, it intends to maintain an active partnership with others in zinc mines that will ensure the long-term supply of zinc to its own smelters. To make any deal attractive to prospective partners it must have a working economic mine. If the company were to close Tara Mines it could not sell it economically and could not recover its investment. I was therefore assured that the company intends to further develop the mine by increasing its investment as soon as it is satisfied that zinc prices are moving sustainably in the right direction. This strategy will allow it to achieve its twin aims of continuity of supply and freeing up part of its investment.
Zinc mining is a global industry with a single worldwide market. The average price of zinc during 2000 was over $1,100 per tonne. This year prices fell from $1,000 in May to approximately $750 in mid-November. At that price level, over half the zinc mines in the world cannot cover their costs of production, let alone service capital and shareholders' funds.
Additional Information.
Tara Mines was obviously not immune from the impact of such price reductions. Not alone is it serious for the company, it is very hard on the workers who are to be laid off and I very much regret their situation. I am assured by Tara Mines that the layoffs are temporary. They are designed to preserve the company's ability to work the mine in the future and thereby ensure the long-term employment of the workers. As the Deputy is aware, employment policy is a matter for my colleague, the Tánaiste and Minister for Enterprise Trade and Employment, Deputy Harney. It would not in any event be appropriate to comment further on the situation when Labour Court hearings have been arranged for today.
I am sure the Minister of State agrees that the announcement by Outokumpo of its decision to lay off 700 workers at Tara Mines is a huge blow to those workers, to the local economy and, indeed, to the national economy. Can the he clarify two points? When he says that Outokumpo has informed him of its intention to reduce its stake in base metals mining, does that mean the company intends to sell Tara Mines? In relation to the company's commitment to reopen the mine once it is clear that zinc prices have been restored to a satisfactory level, has it been indicated to the Minister of State what exactly that meant? Does it refer to prices returning to the level they were at last May? Did the Minister establish when the company expects that to occur and therefore how long the company expects Tara Mines to remain closed?
From our discussions with the company we find it difficult to say when the mine will reopen. It is definitely the company's intention to reopen and the company is committed to remaining here. The mine is a good one and has great potential. I do not doubt that it will reopen; however that depends on an increase in the price of zinc. Even in the past week the price has gone from $750 to $760, which may be an indication of an upturn. At this stage there is no guarantee as the Deputy knows well.
I cannot give a definitive date upon which the mine will reopen, but there is no doubt that it will. That is what the workers have been told time and again. The production and sale of zinc are cyclical. I understand what the Deputy says and the Government certainly does not relish the thought of another 700 workers being let go. It wishes that were not the case and all it can do is do all it can to ensure the mine reopens as soon as possible. The Deputy will agree that it has very little say in zinc prices going up.
Has the Minister of State been given any indication by the company as to whether the mine would be reopened prior to being sold or if it is intended to sell the mine while it is closed? Can he tell the House what is the remaining life of Tara Mines at Navan?
I asked today what the capacity of the mine is. I could not get that information but I will do, whereupon I will convey it to the Deputy. Apparently the mine has a fairly long life expectancy at the current rate of zinc extraction. The mine will not be sold. The company is committed to remaining there and to reopening the mine.
