I do not propose to speak at excessive length this morning on what is obviously a subject of very great importance. I had some doubt as to whether I should speak at all because, though of a different nature to his, I would have to make a like declaration of interest to that made by Senator Russell last evening, in that my professional firm advise the chief company whose happy, fruitful discovery has led to this legislation to combat the evils that are thought to flow from their happy, fruitful discovery. I thought about this because it is right that we should declare an interest. I am sure that my colleagues in the Seanad will know that it does not at all affect the views I express, which would not be the views of that company.
I have had no discussions relative to what I want to say here today. It did not seem to me that merely because my firm took instructions from this company I should be forever silenced from making a contribution to a matter which had interested me long before I received the instructions from them. Indeed I should say with regard to that that I acted for a very large number of the firms which engaged in prospecting work in this country including one in particular which incurred considerable expenditure long before even the first tax holiday was introduced in 1956. Some knowledge of the subject should not silence me. Perhaps it will become clear that what I say really relates to the generality of the situation and I hardly refer to the detail of the matter with regard to any interested party. Should I do so, it would be merely incidental.
I understand the problems the Government were faced with in reaching the decisions enshrined in this Bill, From most of the contributions which have been made I gather that, if there is a public criticism, it is on the whole, a criticism that this legislation, which withdraws a tax holiday and introduces a new set of allowances, does not go far enough in the withdrawal but goes too far in the allowances proposed to be made. My view is completely different. It is possible that the Government, as a pragmatic matter in producing legislation which would allay public feeling with regard to this, had little option but to introduce legislation of this kind. If I had been a member of the Government I could not have persuaded myself that I was entitled to withdraw a concession on the footing of which very large sums of money had been invested by many people, a great majority of whom were resident in Ireland. I could not have persuaded myself that it was right to withdraw a concession in so far as that withdrawal would affect existing companies which had outlayed their moneys on the understanding and had made their calculations on the basis that a particular type of legislation would be there for the benefit of the companies who were raising the money.
However, I can see why people could reach a different conclusion. For instance, there was the outcry, based on the idea that a group of people, a foreign company, were sitting on scarce exhaustible Irish resources which they could take away for their own personal advantage. Public enlightenment was such with regard to this that I do not think we could have begun to have a rational discussion on this matter until we got that particular thing out of the way. Why have the Government introduced this legislation? Why were the committee established in 1971 to consider the possible changes in tax as well as in relation to royalties? Why has this all happened? It is possible to say, although there is a degree of hindsight of course involved in this, that the concessions made in 1967 were excessively generous. A concession, incidentally, was being sought and I believe was being required when the concession of 1967 was made. In other words, the four-year tax holiday followed by the second four-year period of the 1956 legislation was not, in fact, fully satisfying the interested parties.
The reason for all of this is a complete failure to grasp the problems involved in relation to this. It is funny that we are debating this issue. There has been a Departmental committee. I know that the rubrics of it do not require the Department or the Government to publish their report, but it would be such a help to us all if we knew, for example, whether everybody agreed with the recommendations. What was the other point of view? What degree of information did these people have? On foot of what set of facts did they reach their decision? Was the statement of the facts disputable or not? Do we all agree with it? It would be useful to know if the Government at the end of the day reached a decision on foot of an argument which was satisfying to us who are outside the Government as well as to those in the Cabinet who had the duty to do what they have done. I think that is unfortunate.
To go back, I think that probably one must expect that there is a general feeling that the concessions given in 1967 were over-generous. This has led to a consideration within the Department with regard to this. I wonder how much real study has been made by the Departments concerned regarding the whole question of mineral resources, the whole question of the relationship—forget about Ireland for the moment—of modern industrial developments to the availability of resources. How much examination have they made of the whole structure of the business of starting off with the discovery and then the development of that discovery? There seems to be an assumption that we go over to a tap in the corner, turn it on and take a glass of water; that that is our water and why should we let somebody else come in here, walk over to the tap, turn it on and take a glass of water.
It is not as simple as that of course. There is no doubt that the whole situation would be utterly outrageous that we should be allowing foreigners— let us assume for a moment that this was an entirely foreign company; this is disputable and I think inexact in relation to the beneficial ownership of the shares anyhow—let us assume, which is not true, that the companies here were multi-national corporations and were coming in here with their great resources and just running away with what we have. That is not true either. In fact, no multi-national has been involved in the discoveries. If I am correct I think four relatively small companies have been making these discoveries. These are Northgate, Tara, Silver-mines and Avoca. To go back to my simile of the glass of water, the mining position is not quite like that. It is much more like the situation of somebody in a desert who is extremely anxious to find water and there happens to be a well somewhere which, with the expenditure of very scarce resources available to the people in the desert, can be discovered by somebody with pertinacity and the flair and determination to take all the risks and on the basis that he and his family are going to get a good chunk of the water in the well if they do actually get it but with the risk that they will expire in the process.
There is no mine actually existing in an economically significant sense until it is discovered. It is assumed that it is all there and that everybody knows all about it and that there are, say, seven people down in the Geological Survey Office who, if they only took time off, would discover all the resources everywhere and then it would be a simple question of the Minister for Finance going over to London and getting the necessary cash. This is not the situation. We shall be in serious trouble unless as a country we learn to face facts and to examine the clichés that are thrown at us and to remember that things said often enough do not become true by the fact of their being said often enough.
The public are pushing the Government towards a kind of legislation, towards a kind of policy which is wrong, based upon a misconception of reality. We as public men have a very serious duty to inform the public so that they understand what they are talking about. There are vast areas of the world which are still unexplored. Let us forget for a moment about the club of Rome. Let us assume that they are wrong and that the whole world can sail along in its present kind of conduct, that on this matter the socialists and capitalists agree. It would be very interesting for the Seanad to engage in a debate as to whether we should not all be wearing hairshirts or whatever you wear when you are cutting back and whether we should not all be giving an example to the world of the kind of life that men will have to live when we use up all these resources, but that would not be right for this particular debate. Let us assume that the world wishes to continue to do what it is doing at the moment. If it is to be able to continue to do what it is doing at the moment it will have to make enormous discoveries of new resources all over the world.
At this point in time there are vast areas of the world unexplored, and from the national point of view as distinct from an international point of view. There are people here who are very concerned about the underdeveloped areas, as I hope I am myself. We are going to help them by making discoveries, although in the short term it may have a bad effect on the Zambian metal prices. However, in the long term the more discoveries that are made the more help we are going to be able to give to the world. If that is so we must encourage people to go about the business of discovery.
A mine is not there until it is discovered. It is no good, for example having a factory on the Aran Islands producing marvellous things to satisfy everyone in the world if these goods cannot reach the mainland. They are only there when they are obtainable. A mine is not discovered without great difficulty. It is not discovered without great risk or without great cost. We must recognise that these operations are costly and risky and that few people are prepared to pursue them. We must frame our policy in this light and get rid of this curious blockage, which is partly anti-foreign, partly anti-landlord—this curious syndrome in which there is an element of envy, an ordinary natural envy, this feeling that these people have got a wonderful thing which we all could have got.
These people have discovered for Ireland a marvellous thing which without their discovery would not be in Ireland in the economic sense of being in Ireland because it is only in Ireland when it is known to be there. I am not a geologist and I have no idea of geological time but let us call it geological time—ages and ages. It might have been lying there for another set of ages.
On that particular point it is perhaps worth knowing that one of the very big international companies had a licence to explore this particular area and gave it up. Then these people took their prospecting licence, went on and made their discovery. It is impossible to talk about mining in Ireland at the moment without referring to this very great mine.
Could we look at some actual facts with regard to the cost of discovery. In the Canadian Mining Journal of April, 1973 Cranston and Martin worked out that in terms of cost and dollars, we can forget about inflation, every discovery in the period 1946 to 1950 cost $2 million. This is the average cost of what must be spent before a discovery is made. In the 1966-1970 period that cost had increased to $15 million. This is one of the side effects of technology.
Technology has been referred to in this debate as if it now got rid of the necessity for the prospectual flair, the individual skill. This is not true. Technology has increased the range of ability to discover but it has also increased the cost of discovery. These are facts worth considering and I should like to be assured that they were considered by the inter-departmental committee. There are many sides to this argument and many countries to be surveyed which are at different stages of economic development, which have different social systems and different political traditions. If changes are taking place in one country, is it right to assume that these changes are in the right direction even for that country? In 1971 the average cost of one Canadian ore discovery was $27 million.
A calculation was made by the Australian mining industry, taking the period of ten years to 1971-72 and this again confirms the Canadian estimate where the Australian average, relating significant mineral discoveries to mineral exploration expenses, worked out at $20 million. That does not guarantee a major discovery. There might be no Navan in that. If there had not been a Navan we would not be having this debate. We would still be wondering if we could further improve the holiday to get somebody to go around and continue to search. What about the prospects of success?
The United States Government's strategic minerals development programme surveyed the period for 1939-49. During that period there were 10,071 prospecting licences granted. Of these 1,342 were worked and abandoned and one successful mine emerged. The odds were 10,000 to one in the range covered by that particular case. This is in relation to the grabbing of what is not there until it is discovered.
In Canada a company called Caminco which has some interests here now had surveyed its own operations during a period of 42 years— 1927-1969. One thousand properties were examined and 78 of these were found worthy of major exploration expense, that is, exploration expense of $100,000 a go, and seven of them became operable mines. A prospector's financial ability to pursue the prospect must be looked at by the Department before he is given the right to go ahead. If one's expenditure does not result in producing something, all is lost. It is completely at risk. Hard work has been put into the project but there is no return. There are no second prizes. There is no place money in this business. You win or you lose. If you lose you lose all. Do those people who are arguing that the Irish people are being robbed of their resources state to the Minister that he should take millions of pounds from the taxpayer or that he should persuade some financier to give him millions for this operation, to engage in the risk involved in this type of exercise? This kind of money is only available for this kind of operation in a free society to the people who can spare it for that kind of activity and who are prepared to take that risk. Are we to take money from people who do not wish to engage in this kind of risk? Are we to tax them down? Are we to force their savings? This is the bit in the puzzle that none of the people against international capital will face up to. Are we to replace international capital, talking generally, by a development dependent upon our own savings? I should like to see any of you facing the hustings on that basis. Are there to be compulsory savings? That would mean a reduction in the standard of living. It would mean a cutting back in the accelerating social programme that we are all so keen to further.
Unless we can establish and develop our industry on the basis of a stable community, generating revenue, these programmes which the Government wish to maintain would have to be cut back. We should look at what is the actual situation here.
From 1956 there were 2,090 prospecting licences issued. There were 90 companies involved. As a result of that operation, there were three economic ore bodies and two marginal ones established. Of these four are in production. That is a rate per operation of .25 per cent. From 1961 £38 million was spent to bring four companies into production. To the most recent date I have seen £3,500,000 was paid to the shareholders. The £38 million had not been recouped in earnings. That does not take into account the £6 million of totally abortive expenditure engaged by the various companies involved.
There is a distinction which is generally made and one which the Minister and one of his colleagues have made also. There seems to be an assumption that in some way mining at the end of the day leaves merely a hole in the ground whereas investment in industry other than mining is on a longer continuing basis, in other words that when one particular hole is exhausted that is the end of the mining industry. There are a lot of holes in the ground in Canada but at this moment after 100 years of mining industry in Canada with all these holes left behind their exports of minerals is in the order of £2,000 million. The assumption is that once a company has organised itself with suitable finance it will bale out. Of course, its funds are committed for prospecting and exploration.
There is something to be said, arising out of what Senator Quinlan said, for examining the kind of inducements we should offer to ensure that the moneys made out of mining activity go back into prospecting here because, of course, international companies will be free to prospect everywhere. In fact, one hole in the ground leads to another; that is the history of the mining industry. The funds become committed to this kind of activity; the people's minds run in this direction. They are mining men; they are miners. George Orwell called the miner a sort of grimy caryatid upon whose shoulders nearly everything that is not grimy is supported. I take that Orwellian sentence as a fairly sound proposition to account for the whole of modern industry. The miner's activities lie at the foundation of the whole of modern development. Without these resources, because of the threat to their existence, because of the possibility of their scarcity, all modern development is cast into doubt as to how long a life it may have.
These activities are of supreme importance to the whole world. That is true whatever view you take of the nature of the social organisation there ought to be. They are in this thing; they like the business; it is risky but they are men who take these risks and, in fact, tend to go on doing so and have done so. This may sound surprising but the Canadian example is not a bad one. When resources in a particular area are used up the funds seek them elsewhere. What has happened in Ireland? This is proven already and arises by implication from what the Minister said in his opening speech in the Dáil. This happened in Ireland. Tynagh mines is not yet a hole in the ground; it is on its way to becoming one, but in the course of the using up the Tynagh mines the very same people, admittedly with another company, went off and found Navan. The very same people who found Navan may go off and find another mine and so on. It is of enormous importance that the Government and the people engaged in public life should look at the realities and should rethink their whole view of the mining industry. If we do not have a right view of it then we have no proper policy about it and we do not have right legislation.
There is a feeling that it is a less worthy activity, less useful a contribution to the economy. We can dispose of the hole-in-the-ground argument on the basis that one hole in the ground is replaced by a potential further hole in the ground by the people who found what was in the first and will find what is in the second hole. When this discovery is made it has an enormously beneficial effect on the economy. Look at the Canadian export figure of £2,000 million a year. I am just taking a recent figure; I have not checked it. The figure here is £20 million at present. That could be, and I hope will be very much more but there is a very low import content involved in making these exports which is not true of many exports. The multiple effect of incomes generated in mining is notably high. The release of the economic forces made by mineral discoveries, I believe, can be seen to enable new countries to develop and stride forward into the circle of developed nations.
Take the Canadian position. It is an industry now 100 years old and it is worth knowing—I am not going to go into details but the Minister will probably concede—that the concessions in these new sets of allowances are not as good as even the existing set of Canadian allowances. They are certainly not as good as the allowances which existed in Canada before the change and they are certainly not as good as those that existed before the tax holiday was introduced in 1956.
During a period of favourable tax treatment in Canada a fine and considerable industry grew up. As a consequence manufacturing industry has been established to supply the services needed by the mining industry, to take the profits of the mining industry. It generates industry both in relation to what is leading into and what is to come out of the activity. I think we must face the facts with regard to this. It seems to be infinitely more important that we have a fine exploration programme going forward here. Getting that launched is much more important than the question of who is going to launch it, who is going to be the beneficiary of the discoveries which are made. The community is the major beneficiary because the final income which remains behind is, in any case, insignificant in comparison with the overall benefits to the community in terms of employment, services and so on.
In Canada there has developed also in the universities tremendous skills which are available for the industry and which are required by the industry. That kind of demand for professional skill, even for solicitors, is beneficial to those on whom the demand is made. I would like to see the kind of sober assessment, which was difficult to make in the situation we had last year, being made of the benefits to the community of mining activities.
In the course of his speech in the Dáil the Minister referred to the fiscal changes taking place in various countries. I think this should be said so often that people would wish we would stop saying it in relation to all our industrial and commercial activities, other than those where we had this export tax concession. When they talk about nationalisation of this, that and the other thing they should really be brought back to the fact that the State is a partner as to 50 per cent in all commercial and industrial activities in the sense that—it may be a sleeping partner—it gets one half of the profits. This seems to be a fairly good position to be in. It is not going to be 50 per cent here with the adjustments to be made in the light of the concessions.
There seemed to be a suggestion that we are making a move which all other wise countries, such as the Philippines, are making and that we are right in doing that but one of these sober countries is Canada. Another is Australia. What has been the effect of the Australian fiscal changes? Canada's situation is enormously different from ours. It has established a vast mining industry which has had 100 years of favourable tax treatment during which it was built up. But let us look at Australia. According to the statistics on mineral exploration published by the Board of Census in Australia, the money being spent on exploration in 1968-69 was 73 million dollars; in 1968/69 it was 118 million dollars; in 1970-71 it was 161 million dollars; in 1971-72 it was down to 117 million dollars; in 1972-73 it was down to 90 million dollars. Its prospect for 1973-74 is 65 million dollars. As a result of these brilliant tax changes the amount of money being spent on exploration in Australia, which is cited to us as an example to follow, has been reduced by 62 per cent.
I am asking the House to assume that it is a good thing that money be spent on exploration, that it is a good thing to continue to be looking for resources that are urgently needed by modern industry if modern industry is to go on. I ask you to forget about ecology for the moment. There are other ways of dealing with that.
We can assume that argument to have been completed. In mid-1971— this, I gather, is one of the great tests of activity in this field—there were 280 diamond drilling rigs in Australia. Two years later this had fallen to 100. Drilling contractors were seeking work overseas; the smaller exploring companies had disappeared and this is one of the features of the situation. They were all small men, men who had gathered together their pence from the Canadian Exchange and who were having a fling and hoping to God they would find something; none of them were "big cheese".
All these companies in Australia have disappeared because of the tax changes—it is no longer interesting for them. Australian-trained drillers are moving overseas. If it is as easy as all that for foreigners to come in to take our scarce resources, why are not we busy taking these somewhere else? Why do we not ring up a number and go off and pick up a zinc mine somewhere? Is it as easy as all that? If it is, these extraordinarily selfish, cruel and avaricious capitalists of Ireland are blind, and dull as ditch water. What is the reason for it? If they are foreigners with us, why are we not foreigners with them?
I do not think it is as easy as all that. There is a great deal of preparedness required, willingness to spend money and to pursue that money with hard work and a good deal of knowledge. We are talking about the lifeline of the modern industrial world; discoveries make possible a reassessment of the degree of scarcity of these resources. I am quite optimistic about this because of the extent to which exploration has not taken place over vast areas of the world. That activity should be encouraged. If I were one of these fellows I would not be seen dead in Ireland at the moment, where the climate of opinion has forced the Government to do this kind of thing. I do not think there is hostility from the Government or from the Revenue Commissioners. This has been forced upon them by an unenlightened public opinion, which is unfriendly and not welcoming. Their line is: "You find and we shall grab".
