Minerals Development Bill 2015: Committee Stage

I welcome the Minister of State at the Department of Communications, Energy and Natural Resources, Deputy Joe McHugh.

Section 1 agreed to.
Amendment No. 1 not moved.
Section 2 agreed to.
Sections 3 to 29, inclusive, agreed to.
SECTION 30

I move amendment No. 2:

In page 30, between lines 4 and 5, to insert the following:

"(3) The Minister shall review all prospecting licences and retention licences every five years.".

Cuirim céad fáilte roimh an Aire Stáit. Táimid ag cur leasaithe chun cinn a thabharfadh cead don Aire athbhreithniú a dhéanamh ar na ceadúnais atá ann faoi láthair nó ceadúnais idirghabhálach gach cúig bliana, agus, sa chás go bhfuil duine a bhfuil ceadúnas acu ag cur isteach ar fhorbairt san eacnamaíocht áitiúil, go bhféadfadh an tAire an ceadúnas a tharraingt siar agus a oscailt suas do bhabhta eile tairisceana.

This amendment relates to a case I dealt with in Connemara. On Second Stage we discussed the long and drawn-out history around many of the minerals licences in the State, some of which date back to landlords who were not resident on the island of Ireland. The particular case I was dealing with related to a person who had a minerals licence in respect of another person's land and that person, on his own land, wanted to develop a quarry but was precluded from doing so because another person held the mineral rights. The person who held the mineral rights had no intention of opening the quarry or doing any work on the other person's land and need never get permission to do that because he was not the owner of the land.

I understand that under the previous legislation there was an option to revoke a licence that was not active. Perhaps the Minister of State might outline how he envisages the new Bill working. Certainly, when I raised this issue with previous Ministers they were slow to act and did not want to intervene, even though the licence was not being used. The licence which dated back to 1972 was not being used but it prevented somebody else who had a bona fide business, a market, and wanted to sell their product from opening a quarry on their own land, due to somebody else having the licence.

Because of the way we have seen some of these licences going, we suggest the Minister should review all prospecting licences and retention licences every five years. It is not appropriate that landlords who may live in Britain or elsewhere should hold the rights to the minerals of the State if they are not making bona fide use of that licence for the good of the State or for the good of local communities, or creating businesses or jobs. I understand there are around 600 licences out there, including prospecting licences. It would be interesting to find out how many are inactive and what the Minister intends to do about them. Will he revoke them? Will he take ownership back into the hands of the State and the Department as that would appear to be a logical thing to do? Fágfaidh mé leis an Aire Stáit é, go bhfeicfidh mé cén freagra atá aige féin.

I support my colleague in respect of licences. I am aware the section allows the Minister to make regulations. The primary legislation gives powers in that regard. In respect of the renewal or grant of licences infinitum is there a requirement to renew every five years or ten years? I suppose "use it or lose it" is the terminology we would use. If people are getting a licence it would make sense if they know they must act on it in the same way as a planning permission must be acted on within five years or else it expires and one has to go through the licensing process again and take one's chances. The point is well made by my colleague that one needs to ensure there is an incentive for the licence to be used.

I agree with the Senators' concerns about keeping licences under review. A five-year review interval would be too lenient. Prospecting licences are granted initially for a period of six years and may be renewed for a further six years, if warranted. Thereafter, the licence may be renewed for periods of one or two years, depending on circumstances. During the six-year term of the licence, every licence is subject to formal review at two-year intervals and thereafter on renewal. This regime has been in place by administrative procedure since 1994 and has worked well. It is my intention that these arrangements will not change following enactment of the Bill. Section 29 provides that the Minister will determine the time limits for which prospecting licences and retention licences may be granted subject to any maximum limit prescribed under section 30.

I do not propose to grant a retention licence for as long as six years, but the Bill allows flexibility, having regard to the particular circumstances. Retention licences will be formally reviewed at the same frequency as prospecting licences. Apart from formal reviews, the technical staff of the Department maintain contact with licensees throughout the licence term and keep apprised of developments. The proposed amendment is, therefore, unnecessary and I am not inclined to accept it.

I accept the Senator's point regarding prospecting licences. He is correct that there are between 550 and 600 such licences. He also asked how many prospecting licences are inactive and how many are active. All of the licences are active.

I reiterate that a prospecting licence is not a permit to mine. It is not always clear that a prospecting licence only allows the holder to explore for minerals. It is, therefore, a licence to spend money on exploration activities which, in itself, gives no return to the holder of the licence. Once prospecting has been completed, licence holders must go through the full rigours of the application process, which includes a planning process and the involvement of the Environmental Protection Agency.

I appreciate the Senator's concern regarding this matter. He should note that the legislation provides for a review to be held every two years to maintain vigilance.

I appreciate the Minister of State's response. He referred to 600 active licences. Are there inactive licences?

Every licence is, therefore, active. What is the case with regard to mining licences? For obvious reasons, I will not refer to the specific details of the case I highlighted. In that case, the licence to mine has not been acted on for more than 30 years. I understand a significant number of such inactive licences may be in place across the island. The previous Act contained a clause which allowed the Minister to revoke a licence where no action was being taken on foot of it. I called on the previous Minister of State, Deputy Fergus O'Dowd, to avail of this provision. Is there any point in having such a power if the Minister is unwilling to clear the decks by revoking inactive licences? We want minerals to be utilised for the good of the State and to create employment and products in a sustainable and environmentally friendly manner. We must ensure there are no mechanisms available to licence holders to block competitors from entering a market. I am informed this was being done in the case I cited.

I noted the Minister of State wears two hats in that he is also responsible for the National Parks and Wildlife Service. Does it make sense to grant prospecting licences in national heritage areas and special areas of conservation? I am aware of a case of a mining company which is mining in and around Carna in Connemara. Most of the area for which the prospecting licence was granted is located in a special area of conservation. If the company in question were to find gold "in them thar hills", as one might say, what chance is there that a company would be allowed to mine in a special area of conservation? Would this be a waste of the company's time?

What criteria will be used in the review process? Will the review amount to nothing more than a cursory examination of the file followed by a decision to allow the licensee to continue to prospect for another six years or will there be a mechanism for rescinding the licence if A, B or C has not been done in the preceding six years? Is the Government intent on promoting the development of the industry through mineral mining or will it allow reviews of licences to tick boxes without any development taking place at the end of the process?

I concur with the point made by Senator Trevor Ó Clochartaigh on special areas of conservation. Will the regulations include a provision that licences will not be granted in special areas of conservation? The farming community finds it difficult to do any works on lands located within a special area of conservation. Is it appropriate and does it waste the time of companies to allow licence applications to be made and possibly granted in respect of areas that fall within special areas of conservation when the chances of mining or engaging in any activity in the area in question are limited? One wonders if this will be the case. I am sure farmers are aggrieved that they are not permitted to engage in anything more than minimal activity in a special area of conservation when there is a possibility that mining companies will be allowed to remove the side of a mountain if they are granted a licence. This issue is of interest to everybody, especially the farming community. It is only fair to mining companies and anyone else applying for a prospecting licence that they be made aware that applications pertaining to special areas of conservation will not be granted because these areas are protected locations and habitats. This must be spelled out either in the regulations or legislation.

The Senators raised a number of issues. While we are digressing a little from the substance of the proposed amendment, the issues raised are important nonetheless. We must be definitive in differentiating between a prospecting licence and a mining licence. The former does not confer ownership or allow mining to take place. It is important to clarify that. Prospecting creates a fear in local communities that mining for gold or other minerals will follow. It is important to make clear that a prospecting licence does not allowing mining.

Inactive prospecting licences are revoked and have been revoked in some instances. The exclusive right to mine is vested in the Minister. A number of stakeholders are involved in the process. Outside the scope of the Bill, there is also an important relationship between the local authorities, the Environmental Protection Agency, the Department and private companies. The community is critically important in this regard and communities must be part of the relationship. No mining company will start operations in a rural or urban area without establishing a solid relationship with the local community.

The Senators raised questions concerning special areas of conservation, special protection areas and natural heritage areas. This is a difficult issue for the National Parks and Wildlife Service in that in areas that have been categorised as special areas of conservation, local communities feel under pressure regarding the possibility that their sons and daughters will be able to build homes. As the Senators will be aware, it is still possible to build in special areas of conservation and special protection areas provided the proper processes are adhered to, for example, in respect of environmental impact studies and other investigations, environmental, community or otherwise. It is important to ensure we have sustainable communities. Similarly, mining may proceed in special areas of conservation and special protection areas.

Senator Mark Daly referred to the fears of farmers and asked where they stand in this process. The proper mechanisms are in place and it is important that proper processes are adhered to. While the exclusive right to mine is vested in the Minister, community engagement must also take place.

Farmers who wish to plough land in a special area of conservation must request permission to do so from the local office of the National Parks and Wildlife Service. This may appear prescriptive to outsiders. Senator Trevor Ó Clochartaigh asked about the other hat I wear in another Department. Similarly, given that a prospecting licence does not confer on the holder a right to mine, companies wishing to proceed from prospecting to mining must go through a rigorous planning process which involves consultation with and adjudication by the Environmental Protection Agency. If a licence to mine is subsequently granted, the company must comply with the conditions that apply.

Legislation in this area needs to be upgraded to encompass all elements of the process, from the pre-mining stage, through the mining stage and after mining ceases.

The legislation was needed to cover every process, from pre-mining, active and post-mining. Even while that legislation is not in place it is already happening in places such as Lisheen. There is money set aside. The process of rehabilitation is starting as the mine closes. It is important to get this right and the issues and concerns that the Senators raised here today are the questions I will be asking and have asked the officials in the preparation of this legislation.

What is the review process? What does it entail? Is it just a desk review where a civil servant will check that the boxes are ticked or will there be a consultation with the community, the National Parks and Wildlife Service and other State agencies? I am not sure. We are drawing the line between prospecting and drilling but my understanding is that prospecting can be fairly noisy and disruptive and the machinery is not insubstantial. One must consider that in a special area of conservation farmers have to get permission before they cut hedges which is not as noisy or as obtrusive. Some of the prospecting I have heard of and seen photographs of is substantial work. The noise can affect the people in the area. What is the review process? Will the Minister be reviewing the licences or will a civil servant hand a file to the Minister and say, "Tick these for another six years and let them off to go prospecting again," or will we have an engagement with stakeholders in the review process?

The process is important and there has to be a community consultation with any planning application. That opportunity will be afforded and there will be a period of time to do that. It is also important to point out that the environmental impact assessment is not just a case of employing a consultancy company to give a standard report and tick the boxes. In my position as Minister of State with a vested interest because of my responsibility for mining, I see that it is important that it is rigorous and that there is consultation with the communities. There have been many mistakes made in the past about planning, be it single or multiple development. We have to bring all the lessons learned into it. We can learn about processes from the good and positive aspects of building regulation. We need a very active, open and transparent process. As a former community development worker, I know the community has to be at the heart of it because if the community does not support a project, nine out of ten times it will not work.

That point about communities is debatable but we better not go down that route. I know that Senator John Whelan will possibly have something to say about wind turbine projects and community support for some of those that have got permission. I am taking on board what the Minister of State is saying and we might withdraw the amendment with leave to table it, or a similar one, on Report Stage. I take on board that the Minister of State has considered the timescale and that we are all singing from a similar hymn sheet.

Amendment, by leave, withdrawn.
Section 30 agreed to.
Sections 31 to 81, inclusive, agreed to.
SECTION 82
Question proposed: "That section 82 stand part of the Bill."

We oppose this section. The Minister of State has mentioned that the right to mine minerals resides with the Minister and the State and that, therefore, he or she acts on behalf of the State. We oppose the sale of any State asset. Minerals, just like other State-owned property or goods, are an asset to the State and their development should be used for the benefit of the people in order that we do not see a situation where the State hands over its ownership rights to mineral assets. There has been for too long a history of privatisation in this country and the handing over of State assets and we do not wish to see it extended to mineral assets, no matter how small. We do not see why there is any need to have this measure as part of the legislation. No matter how small the deposits in question are, it would be better for them to reside with the Minister and if a licence to mine was required. That is the reason we oppose the section.

We are concerned about this section. I suggest the Minister and his officials examine the wording if he is not willing to accept the Committee Stage amendment. A definition of "small" would be helpful for the Minister and future Ministers because we could do without a tribunal where somebody's definition of small was €500,000 and then somebody else's definition was €10 million and then someone else said €100 million is small. Donald Trump would argue that $500 million was small money.

The cwording is, "if the Minister considers that on account of the small tonnage or value of the minerals concerned it is expedient and efficient to do so". There needs to be some definition of "small". I looked through the definition section and I do not think "small" is defined in the legislation, which means that it is based on the opinion of the Minister. It would be appropriate for the Department to provide some guidelines. I do not suggest regulations because then the Minister could change his own regulations. Not having a definition of "small" represents poor drafting. It means that any Minister could just say it was his or her version of small tonnage or value.

We have had too many tribunals that resulted from the fact that legislation was not in place or not strong or robust enough. We must ensure it is clear what is meant by "small". In legislative terms it is far too vague.

Section 82 provides that the Minister, with the consent of the Minister for Public Expenditure and Reform, may sell State-owned minerals instead of granting a mining licence where the tonnage or value of the minerals is small and it is expedient and efficient to do so. Given that efficiency and expediency are included, one hat probably does not fit all; however, I take the Senator's point about the definition. Such minerals will then become excepted minerals, which means the Minister will not have the exclusive right to work them, and the Mining Board will be so advised.

While I share the concerns about the sale of State assets Senator Trevor Ó Clochartaigh expressed on Second Stage, I assure him and Senators David Cullinane and Kathryn Reilly that it is not my intention in proposing the section. The section is intended to address a situation in which a small deposit of low-value minerals is identified, and setting up a procedure for collecting periodic royalties would not be justified on grounds of the cost of administration. The sale of the minerals in a once-off, up-front deal would be more appropriate in such circumstances. The sale of the minerals would be limited to the particular minerals being mined and considered only where the Minister was confident that the full value of the deposit could be accurately predicted and a net present value could be placed up on it. The consent of the Minister for Public Expenditure and Reform would be required before such an arrangement would be entered into. While the provision would rarely be justified, it would be useful for the Minister of the day to have the option available, should it be considered appropriate. Therefore, I am not inclined to accept the Senators' arguments.

Obviously, there is a raison d'être for the section and I accept the bona fides of the officials that they are inserting it to solve a particular problem they are experiencing. How significant a problem is it? Are there many of these small deposits? Is the Department having an ongoing problem? How small are the small deposits that have come to light to date? If the Minister of State could clarify this, it might give us a better sense of it.

It would be helpful if there were an outline of previous applications and information on small deposits that may have been sold in the past. I am perplexed as to the benefit. When dealing with minerals and mining licences, guessing how much is down there is an art and a science at the same time. My concern and that of everybody else is that the maximum return be made to the Exchequer. I would always imagine that licensing migjt be the better option, given that the Exchequer would receive a share of what was being extracted, which would be a better return, and there is always a chance that, after a piece of ground has been sold for a small fee, extra deposits would be found, leaving the taxpayer at a loss for no real gain. I seek clarification on what has happened in the past regarding possible sales of what was deemed to be small tonnage or value and how much was deemed small. At the next opportunity, the Minister could tighten it up. It is too loose from a legislative point of view.

I do not want to underestimate the importance of the Senators' contributions, given that the issue is important. The section is a precaution. The scenario has not happened before. Some 60% to 65% of minerals are estimated to be in State ownership. This figure can never be firmly established unless all mineral deposits are identified and located. Private mineral ownership arises mainly when the land in question has not been dealt with by the Land Commission since 1903. If the Land Commission has dealt with the lands, the mineral rights are likely to be retained by the State. The fact that something has not happened does not mean it will not happen. It is very much a precautionary measure. The wording specifies that it will apply if it arises in the future. I take the point on the definition of "small" and the provision for expediency and efficiency. The parameters will differ in different cases and regions and depending on the operations and minerals involved.

With all due respect, we are not convinced by the Minister of State's argument. On a point of principle - we believe the State should own the mineral assets - we will refuse to accept the section.

Question put and declared carried.
Sections 83 to 251, inclusive, agreed to.
SCHEDULE
Question proposed: "That the Schedule be the Schedule to the Bill."

We spoke the last day about bringing the definition of "dolomitic limestone" into line with that used in the North. I refer to the famous reference to "85 percent" in the definition, as it stands. I do not know what the view of the Minister of State and his officials is in this regard. This is one of the materials listed in the Schedule. Obviously, we are not pressing it to a vote. It is just a concern that has been highlighted by the Department of Communications, Energy and Natural Resources in meetings with various concerned parties. It is about the revenue that is brought in from this particular provision and about how the classification of "dolomitic limestone" would be undertaken.

Does the Minister of State have a view in relation to that particular material?

I am aware that the Senator raised this issue previously. It is under active consideration and we are working towards a definition. I am confident that I will be in a position in the Dáil to make a technical amendment. Táimid ag fáil níos gaire don líne. We are getting closer to the line in terms of the definition. The Senator raised it the last day and we have been working hard on it in the intervening period. I will put down a technical amendment in the Dáil on this specific item. I thank the Senator for raising the matter.

I thank the Minister of State for his reply.

Question put and agreed to.
TITLE
Question proposed: "That the Title be the Title to the Bill."

I thank the Minister of State and his staff and all those who contributed to the Bill. Should things not work out politically, the Acting Chairman might consider the local mart given his performance today and the numbers that he went through. I am obviously joking.

Question put and agreed to.
Bill reported without amendment.

When is it proposed to take Report Stage?

Report Stage ordered for Tuesday, 6 October 2015.
Sitting suspended at 3.55 p.m. and resumed at 5 p.m.