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.
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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.