The main purpose of this Bill is to provide for the making of further advances to Mianraí, Teoranta for work in the Slievardagh Coalfield. Before explaining the necessity for this provision, I should like to review briefly the circumstances which led the State to intervene in the working of the anthracite coal deposits in this coalfield. Senators are probably aware that before the war the Slievardagh Coalfield was examined in detail, at the expense of the State, by a firm of consulting engineers who estimated that the workable reserves of coal there were about 5,500,000 tons, and recommended that commercial working of the coal deposits should be undertaken. I might say that since the consulting engineers made their estimate, more information has come to light which tends to suggest that the reserves of extractable coal there do not exceed 2,000,000 tons. In any case, although the report by these engineers was available for inspection by interested persons for a number of years, no acceptable proposals for the commercial working of the coalfield were received from private interests. Shortly after the outbreak of war, supplies of imported coal became scarce, and an Act was pased setting up the Slievardagh Coalfield Company to develop and work the coalfield. Between the years 1941 and 1947, this company produced and sold about 78,000 tons of anthracite coal from an area known as Ballynunty. The company lost money in the venture mainly because they were told to produce the maximum amount of coal in the shortest possible time, even though it was recognised that this policy might not be suitable from the point of view of long term development and might involve losses.
It may be said that the production of coal by Mianraí, Teoranta at Slievardagh as an emergency measure during a period of scarcity ceased at the end of 1947, when the Minerals Company Act, 1947, became law. That Act provides for the making of advances within a limit of £50,000 to Mianraí, Teoranta for the development and working of the coalfield. By the beginning of 1948, the company were satisfied that the coal seam at Ballynunty, which they had been working during the war years, was hopelessly uneconomic and they decided, therefore, to abandon it. The company submitted, however, proposals for the opening of a new mine near the village of Ballingarry. They carried out boring operations designed to test the extent and quality of the coal in this part of the coalfield and obtained expert advice that there were indications of a substantial deposit of coal at Ballingarry, that the cost of bringing a mine there to full production of 100 tons of anthracite a day (i.e., about 25,000 tons a year) would be about £50,000, and that the proposition represented a fair mining risk. The Government, having considered this proposal very carefully, decided to authorise Mianraí, Teoranta to commence work on the opening of the new mine.
Before the company could commence work on the opening of the new mine, they had to clean up the old working at Ballynunty which they were abandoning. This involved the removal of some coal there, the rendering safe of shafts and tunnels for the prevention of accidents, and the transfer of machinery and buildings to the site of the new operations. This work cost about £6,000, leaving a balance of £44,000 available under the Act of 1947 for work on the new mine which commenced on the 1st September, 1948. It was estimated by the company that, through the use of machinery and buildings from the old workings, this balance of £44,000 would suffice because they expected that coal production from the new mine would commence in July, 1949, and that production would be stepped up to 250 tons a week by the end of 1949. I regret to have to inform Senators that these expectations were not realised. If they had been, the company would have had revenue from the sale of coal by the end of 1949 to supplement the amount available under the statute for advances for the developing and working of the new mine.
The plan of operations was to drive two tunnels a distance of about 750 feet through rock to reach the coal seams. It was hoped to drive these tunnels at a rate of 40 feet per week, but, unfortunately, the company encountered extremely difficult and unfavourable conditions underground which slowed up actual rate of progress to about 17 feet a week. Consequently, work on the tunnels leading to the coal took twice as long as had been expected, and it will be readily appreciated that the cost of the work was substantially increased because the company had to spend more money than they had estimated on wages, stores, explosives, etc., at a time when they had no receipts from the sale of coal. In mining, it is of course difficult to foresee what the conditions will be like below the surface, but in this case the difficulties were unexpected because the company were relying on their experience in opening the old mine at Ballynunty where underground conditions were normal. As a result of these difficulties, the company have informed me that the balance of the moneys available under the Act of 1947 will not be sufficient to enable them to bring the mine at Ballingarry to the point when they anticipate it will be profit-earning. They have estimated that they will require the limit on advances laid down by that Act to be extended by a further £38,000 to enable them to meet the cost of work at the new mine until the 1st September, 1951, by which date they expect the mine will be self-supporting. Part of this additional sum will be used to purchase capital equipment for the mine, including a coal washing plant costing about £10,000, the use of which would render more readily saleable the coal raised from the mine.
The directors of the company have assured me that the expenditure of this further sum of £38,000 will suffice to bring the Ballingarry mine to the stage when it will be profit-earning. Production of coal has already reached 100 tons a week but it will take the company about another year and a half to bring the mine to the stage of full production, when the output will be increased to about 500 tons a week. I am sure that Senators will understand that until production on this scale has been reached and maintained over a period, it is difficult to be certain whether receipts from sales will exceed the over all cost of production so as to leave a margin of profit. The quality of the coal, prevailing wage rates, the cost of raw materials and the general supply position of anthracite are the main factors which will affect production costs and selling prices when the mine is in full production, and it will be appreciated that these factors cannot be determined precisely at present. In the circumstances, I would not feel justified at this stage in assuring the House that the expenditure of this further sum of £38,000 will enable the company to put the Ballingarry mine on a profit-earning basis which would secure repayment of the advances made from the Exchequer. Indeed, I must stress that in this as in all mining undertakings, there is a large element of risk and I must point out that if there was a guarantee or even a reasonable expectation that profits could be earned by mining coal at Slievardagh, private enterprise would not be slow to undertake the work and the State would not be called upon to foot the Bill. I am hopeful, however, that the expenditure of this further £38,000 will enable the company to bring the mine to the stage when receipts from the sale of coal will at least meet working costs.
The position at present is that the company have spent so far about £44,000 on work at Ballingarry and that there are now no funds left, under the Act of 1947, which could be advanced to them to allow them to continue the work. I need hardly say that I am disappointed that the company have not found it possible to keep within their original estimate of £50,000. I regret having to ask the Oireachtas to provide this further sum of £38,000. However, I feel that, since the circumstances which have given rise to this request for extra funds are fortuitous, it is only reasonable to allow the company to complete the job it was given to do, particularly since anthracite coal is still in short supply and the indications are that it will stay scarce for a considerable time to come. The only alternative to providing additional funds would be to close down completely the company's coal mining operations in the Slievardagh area. I am not prepared to recommend this course, which would involve the loss of the money which has been expended already and would lead to considerable unemployment in the area. There are at present about 85 men employed by Mianraí, Teoranta at Ballingarry and the company have stated that they will employ from 200 to 250 men when the mine is in full production. For many of these men coal mining is the only source of employment, and if the mine were closed they would be deprived of their only chance of earning a livelihood near their homes and would probably be forced to emigrate. The Government have decided, therefore, that the approval of the Oireachtas should be sought for continuing work at Ballingarry and that additional funds within a limit of £38,000 should be advanced to the company for this purpose. Section 2 of the Bill gives effect to this decision by substituting the words "Eighty-eight thousand pounds" for the words "Fifty thousand pounds" in Section 3 of the Minerals Company Act, 1947. I may assure Senators that I will neglect no opportunity of impressing upon the company the necessity for conducting the operations at Ballingarry in the most efficient and economic manner possible so that the mine may be brought to the full production stage as soon as possible and at the smallest possible cost to the Exchequer.
The remaining purpose of this Bill arises out of the minerals exploration work which is being carried out by Mianraí, Teoranta at the expense of the State. I am advised that at present money may not be paid to the company under the Minerals Company Act, 1947, for the purchase of land and mineral rights. Section 3 of this Bill is designed to amend sub-section (2) of Section 5 of the Act of 1947 to permit of the payment of money to the company for this purpose. This amendment is necessary in order that the company may be enabled to purchase mineral rights, etc., in the areas where substantial expenditure is being incurred on exploratory work, and it is desirable that the company should have secure title in order that any benefits resulting from the exploratory work which is being carried out at State expense, may accrue to this State and not to private interests.
I would like to refer to one other matter in connection with it. The difficulties which occurred at Slievardagh were not anticipated. The mining experts who examined the mine had surveyed it in detail, but it was found when the borings were made that the lie of the ground underneath was such that normal development was not possible according to ordinary recognised mining practice. These difficulties necessitated much more exhaustive work and consequently exhausted the resources which the company had available.
