Ireland's success in developing its mineral resources has created well paid employment, often in relatively underdeveloped rural areas and has provided significant income to the State. We now have a number of important mines in operation and I believe there are good prospects for further discoveries but these will only be made if we can continue to attract investment in exploration.
A significant element in any international exploration company's decision to invest money is the system of mineral rights ownership. The first requirement is a system which ensures that a successful company can be confident it can obtain legal title and I am satisfied that the current Minerals Development Acts cater for this. However, it is also important that unnecessary complications are avoided, especially if they introduce uncertainty or delays. The main purpose of this Bill is to clarify some anomalies which have come to light during the processing of mining leases and licences, particularly the position of some minerals which are vested in the Irish Land Commission. It is a technical measure with no adverse implications for anybody.
The principal provision of the Bill, contained in section 2, is to amend the definition of State minerals in the Minerals Development Act, 1940. This amendment relates to mineral rights which were acquired by the Land Commission by a variety of means. To outline the background to this provision, I need to explain certain aspects of mineral rights and ownership which are at the best of times complicated, even to those who are familiar with them.
The Minerals Development Act, 1940, provides a regulatory framework for the development of State-owned minerals. Those in private ownership are covered by the Minerals Development Act, 1979, which I will go into later. The 1940 Act allows me to issue State mining leases for State minerals to the discoverers of economic mineral deposits so they can be developed. State minerals are defined in section 5 as including:
(a)any minerals and any exclusive mining right which, at the date of passing of this Act, belong to or are the property of the State or the People, and are vested . . . in the State or in any Minister of State;
(b)any minerals and any exclusive mining right which, on or after the passing of this Act, become, by any means, the property of or vested in the State or the People, or become vested in a Minister of State, as on and from the date upon which they become such property or become so vested.
The main way that such rights were acquired by the State was through dealings by the Irish Land Commission under the Land Act, 1903, the 1903 Act, and the Land Act, 1923, the 1923 Act. The commission also acquired whatever minerals and mining rights were vested in the Congested Districts Board at the time of its dissolution under the Land Law (Commission) Act, 1923.
In general, whenever the Land Commission divided lands vested in it, or assisted tenants in direct purchase from landlords, the associated mineral rights were not transferred to the new owners. Instead they were reserved initially to the Commission itself. In the case of dealings under the 1923 Act, these mineral rights became vested in the State. The situation was different and more complicated, however, where the dealings were done under the 1903 Act. Following enactment of the Mines and Minerals Act, 1931, the 1903 Act minerals also became vested in the State. However, for pre-1931 acquisitions under the 1903 Act – and Congested Districts Board acquisitions – the mineral rights were vested in the Land Commission itself. It had been assumed until recently that all such mineral rights were State minerals within the terms of the Minerals Development Act, 1940, and, as such, they have in good faith been included in many State mining leases issued under that Act by successive Ministers.
My Department has now been advised by the Chief State Solicitor's office, however, that this assumption is likely to have been incorrect. The Attorney General agrees with this advice. Under the definition of State minerals as it stands in the 1940 Act, even though the Land Commission is an arm of the State, it should possibly have been regarded for mineral ownership purposes as a private body. This could call into question the power of the Minister to grant leases and cast doubt on the validity of leases already granted.
Since this Bill was initiated, the Minister for Agriculture and Food has made an order, dated 30 March 1999, entitled the Irish Land Commission (Dissolution) Act, 1992 (Commencement) Order, 1999. That order gives effect to the dissolution of the Irish Land Commission, as provided for in the 1992 Act, by appointing 31 March 1999 as the day on which that Act came into operation.
One of the effects of this order is that, as and from 31 March 1999, all rights, title and property of the Irish Land Commission became vested in the Minister for Agriculture and Food since the ILC has now ceased to exist. This means that the various mineral rights referred to in this Bill are now State minerals within the meaning of section 5(b) of the Minerals Development Act, 1940, at least with effect from 1 March 1999. Of course, when this Bill was being drafted, I was not aware that this would be the case.
Notwithstanding the dissolution of the ILC, the situation regarding leases already granted still needs to be addressed, as do the other issues covered by the Bill. This Bill provides that the relevant rights will be deemed to be, and to always have been State minerals for the purposes of section 5(a) of the 1940 Act. It will, in effect, establish a separate category of rights which were formerly vested in the ILC, relating only to minerals, upon which I can rely to exercise my powers under the Minerals Development Acts. The passage of the Bill should still proceed, therefore, and will not impact on the rights vested in the Minister for Agriculture and Food. Section 2 of this Bill, if enacted, will mean that there can be no doubt that all minerals acquired by the ILC are State minerals and that all such leases granted by me, or which have been granted by my predecessors, will be valid.
I will give an example of the type of complications which have arisen. In October 1997, I was pleased to grant a State mining lease to the developers of a major new zinc and lead mine at Lisheen in north Tipperary. This mine is being jointly developed by an Irish company, Ivernia West, and their joint venture partners, Minorco, which is a part of the Anglo American Corporation, one of the largest and most successful international mining conglomerates. While most of the minerals forming the Lisheen deposit are clearly State minerals within the meaning of the 1940 Act, a significant proportion was acquired by the Land Commission under the 1903 Act. It was during the course of title investigation for the Lisheen lease that the question of the status of these minerals came to light.
The companies were understandably interested in the whole deposit which they had found and were not concerned with the niceties of the difference between State minerals and Land Commission minerals. Their lease application was based on both the 1903 and 1923 Acts minerals and all assumptions concerning the economics of the development, on the part of both the applicants and of my Department, were based on the entire deposit. While in 1903, minerals were not part of the area of immediate attention for the mine, they did form an important part of the reserves and the position needed to be regularised to give the companies involved full security.
The lease which I granted could cover only the State minerals. In order, therefore, to satisfy the legitimate expectation of the developers that they would be able to mine the whole deposit as a unit, I built into the lease a commitment that it would be extended to include 1903 Act minerals if and when they became State minerals. One of the reasons I proposed this Bill was to allow me to follow through on that commitment.
This issue also had implications for the Irish Gypsum quarry at Knocknacran, County Monaghan, part of which also relates to 1903 Act minerals. A consolidated lease is under negotiation between the company and my Department to give the operators continued rights of working. This deposit supports the plaster factory at Kingscourt as well as providing essential materials for cement manufacture. Continued use of Irish raw materials for these essential components of construction depends on this continuity.
The Bill also deals with two other issues which I have taken this opportunity to address. I have talked so far about State-owned mineral rights. However, a significant proportion of the mineral resources of the State is in private ownership. The working of these minerals is provided for in the Minerals Development Act, 1979, which vested in the Minister with responsibility for mining the exclusive right to work all minerals, with very few exceptions, and the right to license private individuals or companies to work those minerals, subject to a right to compensation to the owners of the minerals.
The purpose of the 1979 Act was to enable privately owned minerals to be developed efficiently, in the interests of both the developer and the State. It also gave a greater degree of certainty to exploration companies that they would be able to bring their discoveries into production even if these proved not to be State owned minerals. The constitutional rights of mineral owners were protected by the right to compensation to be paid at the time that any minerals are actually worked.
Section 20 of the Act conferred this right to compensation on the person who had an estate or interest in the minerals on 20 June 1979. It also provided that this right could devolve and be disposed of. In other words, it separated the right to compensation from the ownership of the minerals. As a result, the normal transaction of selling the full title to a parcel of land which also carried with it the minerals ownership would not include the right to compensation. Most buyers and sellers of land are not aware of this situation since they are mainly concerned with the surface rights and not with the abstruse position underground about minerals which may or may not have any value.
This situation greatly and unduly complicates and delays dealing with these minerals when I wish to grant a State mining licence. The 1979 Act procedures include giving extensive public notice of my intention to permit the working of the minerals and direct notice to anyone who may appear to me to have an interest. This is to allow individuals an opportunity to establish their ownership of the minerals. However, the person entitled to the compensation today is not necessarily the owner of either the minerals or the land, can be extremely difficult to identify and may possibly be unaware of his or her entitlement. If nothing is done, the position will only become more difficult as the years pass.
Section 3 of the Bill deals with this problem. It will ensure that, in future, the right to compensation for the working of minerals under section 20 of the 1979 Act cannot be separated from the ownership of the minerals and that, on any future sale or conveyance of the minerals, the right to compensation shall transfer automatically also. This, in effect, means that the right of compensation shall vest in the owner of the minerals at the time they are developed or mined, except where a sale or conveyance which separated the right to compensation from the ownership of minerals has already taken place since 1979.
Section 4 of the Bill deals with prosecutions for summary offences under the Minerals Development Acts. As the law stands, the Director of Public Prosecutions must bring all prosecutions for a number of specified summary offences under the Minerals Development Acts, 1940 to 1995, because the Acts make no provision for who may prosecute. This situation is unsatisfactory as it would involve the Director of Public Prosecutions in prosecuting relatively minor offences in the District Court which, in the interests of administrative efficiency, would be better pursued by the Minister or by the Mining Board, as appropriate. This is a simple technical amendment with a consequent provision in section 5 relating to expenses in bringing such cases.
I am introducing this Bill to deal with these matters now rather than wait for completion of a fundamental review of minerals policy and regulatory practice which is under way in my Department. This process started with the national minerals policy review group's examination of the industry in 1994. That group presented its report in April 1995. It had many valid points to make and a large range of recommendations, some of which have already been implemented. The group's report is a useful tool in assisting the formulation of policy. However, it can only be regarded as one input. While some recommendations have merit, others may not have been practical and others still have been overtaken by changing circumstances both fiscal and industrial.
I intend to bring forward more detailed legislative proposals within the next year which will address, in a reasoned way, many of the issues and outstanding recommendations contained in the national minerals policy review group's report. However, there are many other issues which my Department has been examining in the light of recent operational experience. I hope that this process will result in a clear set of legislative proposals which will ensure an ordered and sensible approach to development of our nation's mineral resources into the next millennium.
The Bill, when enacted, will clarify the position with regard to minerals clearly in public ownership but technically not vested in the State. Its principal purpose is to enable me to fulfil the commitment I gave to the developers at the Lisheen mine in Tipperary, a fine example of a modern mine development using best available technology. I granted a lease to the companies concerned following a rigorous examination by my Department of their development plan and environmental impact statement. The project also required, and achieved, planning permission and an integrated pollution control licence from the Environmental Protection Agency. It is worth noting that the EPA was the first in the European Union to grant such a licence for a mine. The degree of public access to these permitting processes ensures that successful projects are designed to the highest environmental standards. People come from all over the world to see the Lisheen mine which is one of the most modern designs of mining available taking into consideration pollution control requirements and EPA safety standards. When fully operational, the mine will have an output of 1.5 million tonnes per annum and will provide direct employment for over 300 people. In addition, the spending power of the mine and its employees will support the local economy and indirectly generate further employment. Production of zinc and lead concentrates is due to commence by the end of this year.
We also have a significant zinc and lead mine at Galmoy in neighbouring County Kilkenny which is now in full production and providing employment for over 200 people. This was the first new base metal mine in Ireland since Tara in the 1970s. I granted two State mining licences to Tara in 1998 to work private minerals adjacent to the existing lease area outside Navan. This is the largest zinc lead mine in Europe and the new licences will help to ensure it will continue in production for many years.
We have an important asset in our national mineral resources which should be developed in an environmentally responsible fashion for the mutual benefit of the nation and private investors. Numerous countries previously hostile to foreign countries developing their mineral resources are now actively seeking such investment. This has increased the competition between countries to persuade explorationists to invest their limited exploration budgets. Ireland has done well in attracting a good share of this exploration investment, due in no small measure to the success of Tara, Galmoy and Lisheen. Our geology holds out the possibility of further discoveries while all three of our major base metal mines have increased their identified reserves through extensive exploration programmes. To continue to support this activity it is essential to have a rational legislative framework to regulate the industry.
Legislation and practices in the minerals sector must be kept up to date and relevant to the modern industry. As part of that process and to clarify the issues I have outlined, I recommend the Bill to the House.