Dáil Éireann - Volume 313 - 03 April, 1979

Supplementary Estimates, 1979. - Vote 43: Industry, Commerce and Energy.

Minister for Health (Mr. Haughey): I move:

That a supplementary sum not exceeding £3,872,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1979, for the salaries and expenses of the Office of the Minister for Industry, Commerce and Energy, including certain services administered by that Office, and for payment of certain loans, subsidies, grants and grants-in-aid.

Minister of State at the Department of Agriculture (Mr. Hussey): Deputies will recall that, when the Minister for Industry, Commerce and Energy introduced a motion in June last dealing with the guaranteeing by the State of loans for Avoca Mines Limited, he informed the House that the Government were in the process of reviewing the question of continuing State support for the mine. As the Minister explained on that occasion, the State has over a long period of years put substantial public funds into the Avoca mine. In more recent years, under the previous and present Governments, State support has taken the form of guarantees for bank borrowings to meet operating losses at the mine.

In connection with the Government's review, the Minister commissioned a report from a firm of consultants with wide international experience in mining and the metals sector generally. His decision to commission the report followed upon a study of the position earlier in 1978 carried out within his Department which suggested that, having regard to the outlook for copper prices at the time and the limited operational options open at Avoca, it was difficult to recommend a sound [970] basis for continued support. However, this Departmental study did identify certain possibilities and these and, indeed all possible options for the mine, were very fully examined by the firm of consultants.

The consultants' report, which was examined in detail in the Department and considered by the Government shortly before Christmas, concluded that, making certain assumptions about future copper prices and other critical factors, a mining programme mainly based on mining out known reserves underground over a period of about four years could be an acceptable option. The report emphasised that this proposal could not be regarded as an acceptable venture in purely commercial terms. However, on the basis of the consultants' report and subject to the discharge by the State of Avoca debts of £3.15 million due to commercial banks and to Fóir Teoranta, thereby relieving the company of an estimated interest burden of £1.6 million over the period, the prospect emerged of a viable future operation which would generate sufficient profits to recover all, or at least a substantial proportion, of State funds amounting to £4.35 million which would have to be committed up to the end of 1979.

The consultants' opinion that the project could not be regarded as a commercial venture confirmed experience over the previous year or more during which considerable efforts had been made, without success, to attract interest from private mining companies. The consultants' estimates of the likely financial outcome over the period in question were based on projections on copper prices which, at the time their report was received in September 1978, appeared very optimistic. Indeed these projections represented a favourable view of future price trends which was by no means shared by all the expert views in relevant technical and financial publications at that time.

The Minister was, therefore, faced with the very difficult decision as to the recommendation which he should make to the Government. The positive aspects of the scheme suggested were, of course, [971] the maintenance of the valuable employment being provided at the mine with the implications this has for the locality generally and the prospect of recovering a significant part of the funds which had already been committed by the State. Against this, the project could not be justified if a decision were based purely on commercial criteria. Furthermore, even though there was the prospect of recovering most of the funds then subject to State guarantee and the additional funds now required, this amount, large though it was, constituted only part of the State funds which had been provided for the Avoca operation over a long period of time. The operations envisaged by the consultants did not hold out any real prospect that the money advanced by the State in earlier years would be recovered.

Finally, even if the apparently optimistic price projections were realised, there were other risk factors which could frustrate realisation of the modest financial objectives envisaged. These additional risk factors included operating costs, the achievement of the projected ore tonnage and grades of ore, not to mention the normal on-going commercial risks involved in any operation and, particularly, in the mining business.

However, having taken all the circumstances and projections into account and fully recognising the inherent risks, the Minister felt justified in recommending to the Government that the State should continue to support the mine for a further period at least. The Government approved this but directed that the Minister should keep the matter under continuous review so that their decision could be reconsidered if there was a marked deterioration in any of the critical factors involved.

As Deputies will have noticed, copper prices have improved very considerably since the consultants' report was received in September last. A firm upward trend in the price was evident over the last few months of 1978. Since then certain international developments affecting potential supply and demand have resulted in a sharp rise in prices so that the optimistic outlook on which the [972] projections of the consultants were based has, up to the present time at any rate, been justified. We are, however, looking at the economic projections over a four- to five-year period ahead. It is scarcely necessary for me to emphasise to the House how volatile the metals market is, particularly the market in copper. There may be an appreciable element of speculation involved in the recent sharp price increase and certain of the international developments which have fired this speculation may prove to be short-term. Nevertheless, certain factors behind the improvement in price are more firmly based so that, even discounting the speculative and temporary elements, the trend seems to be favourable. However, as I have said, the copper market tends to be extremely volatile and it is clear that at any time price levels and the general trend in prices must be major considerations in the on-going review of the situation to which the Government's decision is subject.

The additional support of the Avoca operation now envisaged involves clearance by the State of the company's existing borrowings of £2.85 million from the banks and £300,000 from Fóir Teoranta and the provision of certain additional support. The funds for the clearance of these debts and for the provision of further support will be provided under the authority of the present supplementary estimate. As I have said, the Government decision to continue support will be subject to continuous review. I am not, therefore, in a position to give the House a precise and accurate statement of the additional funds, apart from those to which I have referred, which may be advanced out of the Vote. Part of these additional funds will be devoted to the replacement of essential mining equipment, which will improve the economics of operations, and to cover possible contingencies during 1979. The extent to which funds may be necessary for other purposes will, of course, depend on realised prices for copper concentrates and the other factors which I have mentioned. The best estimate that can be made at this stage is that the total sum required to be provided from the Vote for the various [973] purposes which I have outlined will be £4.35 million. The extent of actual advances from the Vote within this total sum will, of course, depend on the Government's view as to the prospects of achieving the objectives of the present programme. Assuming that the improvement in copper prices is maintained and if there is no substantial deterioration in costs, tonnage mined and processed, ore gradings and so on, and taking account of the relief from bank interest liability which will result from clearance of the bank borrowings, funds additional to those which have been estimated should not be necessary and, in fact, a start on recovery of some of the indebtedness to the State should be possible.

Agreement on the above arrangement has been reached with Avoca Mines Limited and the parent Canadian company, and appropriate legal documents are being drawn up. This will provide for a charge in favour of the State on the assets of the company and also that any surplus revenues arising within the company over the period in question will be exclusively devoted to repaying the indebtedness to the State. Provision is also being made for certain essential controls by the State on expenditure and mining programmes and for involvement by the State in other critical decision areas. The proposal to make funds directly available from the Department's Vote for the maintenance of the mine constitutes a new service for which approval of the House is required. Since it is necessary to implement these arrangements without delay, it is not possible to defer the matter until the general Vote for the Department comes up in the normal course. This is the reason why the matter is being dealt with by way of a Supplementary Estimate.

In view of the pressure on public funds in the current year, it is necessary to ensure that every effort be made to effect savings which will offset, to some extent at least, the additional funds now sought. It is expected to be possible to defer certain projects for which a net provision of £478,000 was made in the main Estimate and to use that sum instead towards the support operations at the Avoca mine. For that reason, the [974] present Supplementary Estimate provides for a net sum of £3.872 million which, together with the savings of £478,000 from the existing Estimate, will enable the Minister to make funds totalling £4.35 million available during 1979 to support operations at the mine. This is a substantial sum of money but to be set against it there is the point that, if the mine were to close now, the State would have to honour its guarantees to the banks and there would be the socioeconomic costs associated with the closure of the mining operation and the loss of employment.

I would like to emphasise again that the situation of the mine will be subject to continuing review because this is a critical part of the Government's decision. The present decision by the Government is not open-ended. It is not an unqualified assurance of support for the full four-to five-year term envisaged in the programme outlined by the consultants. It is a decision to continue support for the time being and to keep the situation under review.

When the Minister introduced the State guarantee motion in the House in June last, he said that the State could not justify maintenance of support for continuing heavy losses at the mine. He indicated that support, if forthcoming, would have to be contingent upon there being the possibility of a viable operation. I am sure the House will agree that the Minister has not been particularly stringent in defining the terms and objectives of the kind of operation which we are prepared to support. But the objectives, modest though they are, must be achieved if continuing support is to be justified. The Minister is confident that the management, the work force, contractors and others involved in Avoca will, as they have in the past, recognise that this is a knife-edge situation and that they will play their full part in giving the venture a reasonable chance of success. Neither the Government nor anyone involved at the mine can do anything about copper prices which are such a crucial factor. But, of course, we are not concerned simply with copper prices in isolation but with the margin between the overall cost of producing a [975] ton of copper at the mine and the price realised for it. If this margin can be kept in the black, our limited objectives can be achieved and the valuable employment and other economic benefits in this area, with its long tradition of copper mining, can be preserved for a further period.

I believe the House will agree that the proposals and conditions for continuing State support for the Avoca mine which I have outlined are reasonable and justify provision of the funds proposed under this Supplementary Estimate.

Mr. Kelly: This party will not object to the Supplementary Estimate. The objective has been shared by all Governments. The Minister pointed out that the last Government also put money into the Avoca mine in the hope of keeping it on its feet. It has been dealt with here in the form of a motion and in the form of parliamentary questions. The Minister has made no secret of the fact that there is a large question mark hanging over the future of the mine and it is not likely to go away.

I cannot resist the temptation to remind the Minister and the House that this is the very area, namely the exploitation of our mining resources, in which the Minister's party told the people in the months coming up to the last general election that there were tens of thousands of secure jobs only waiting to be created. All they had to do was put the Minister's party into office and out of the air would jump tens of thousands of secure jobs in the field of the exploitation of natural resources, particularly in the context of mining resources. The implication lurking not too far beneath the surface of that statement was that nothing but the incompetence and the malice of the National Coalition Government prevented those jobs from being provided.

Two years have now passed and what do we find? The Bula mine is not yet in operation and the Tara mine is staggering under the most severe difficulties. I am not saying that the Government are to blame for either of these matters, but it puts the vainglorious and crazy nature [976] of their election propaganda into perspective. The Avoca mine, which is much older than the mines at Navan, must be helped out yet again, possibly to the tune of £4,385,000. Is this to provide tens of thousands of secure jobs? No; it is to preserve temporarily 230 jobs and there is no promise of security or permanence. It is a matter for themselves. The Minister's speech was not contentious and I do not find fault with it but I regard the concluding words, which no doubt the Minister for Industry, Commerce and Energy would have delivered himself if he had been here, as being the first shots in a campaign to lay the blame for the eventual closure of the Avoca mine—if it ever does close—on the people who work there, manage the place and do business with the mining operation. It is an attempt to lay the blame on anybody and everybody except the Government. In no other field—even the field of ground rents, national joke though that has become—has the potential of the Minister's party measured up so ludicrously badly with their performance than in the field of the development of our national resources, particularly our mining resources.

I do not mean to offend or annoy Deputy Hussey, who is only standing in, but I am not sure how it is that in the Department of Industry, Commerce and Energy, which has three office holders as distinct from the one and a half which Senator Keating had when he was Minister, the three of them are on the wing somewhere. Where is the Minister? Where is Deputy Mrs. Geoghegan-Quinn and where is Deputy Ray Burke? How is it that the Minister of State at the Department of Agriculture has to be in here to deal with this subject? Can it be that the public interest requires that three office holders from the Department should be unable to attend the business of the House? I invite Deputy Hussey, who is standing in and who is a fair-minded man, to ponder in his heart the contrast between the tricoloured piece of literature he brandished around the country this time two years ago and the empty, vainglorious words it contained in regard to mining and natural resources, with the present situation in [977] regard to one of our best known and oldest mining operations. Nearly £4.5 million is being spent merely to allow 230 jobs to carry on for a period into an indefinite but possibly not very distant future. In relation to the per capita cost of industrial jobs——

An Leas-Cheann Comhairle: We must stick strictly to the Avoca mine. If the Deputy can relate this to the Avoca mine, it is all right.

Mr. Kelly: I will relate this to the fact that, if the money represented in this Vote is divided by the number of jobs involved, it works out at about £20,000 per job. One of the daily papers recently gave great prominence to a story to the effect that the IDA job creation programme had worked out in such a way that the jobs they created were costing, not the modest £4,000 or thereabouts which was targeted as being a reasonable per capita job cost, but more like £25,000 per job. The paper pointed to the IDA for ripping the people off to that extent. I was contacted to comment on this and I refused because I thought it an unfair observation on the IDA. A sum of £25,000 per job is not totally excessive. After all, it represents only a few years' gross salary for a wellestablished industrial worker. It is not an excessive investment by the State, provided the employment is a firm job protected against any foreseeable accident. This is not such a situation. We have been asked to vote something like £20,000 per job to protect 230 jobs for a limited period. I recognise that if we do not vote this money the State will become liable for that amount anyway because of its already having underwritten the Avoca borrowings during the lifetime of the Government I worked for. I still ask the House to measure the kind of money we are talking about against the number of jobs involved, apart from the money which the State has injected into the Avoca operations in different connections. All sides of the House are so desperate to create and maintain employment that the ceiling has been taken off any kind of reasonable figure in regard to a sum per job created. While I do not complain about that, because [978] £20,000 or £25,000 does not seem to be an excessive sum to provide a job for a lifetime, it is, however, an awful lot of money to provide a job for only a few years.

I have a suggestion which the House may or may not think is very sensible. The copper mine at Avoca is, to the best of my knowledge, the only copper resource in the EEC, although of a very low grade. If I am right about that, that gives it a value and a dimension over and above its local importance. I realise that the extent of the resources in the mine are not all that enormous and that, if the mine were worked flat out by open cast methods, it would be exhausted in a very few years. Nonetheless, the fact that it is the only copper mine in the European Community might make it possible to pass some of the financial burden of keeping this mine going on to the Community.

The resource which the mine represents, small though it is, is apparently the only resource in the Community. Admittedly, if Spain becomes a European Community member that will revolutionise the situation in regard to indigenous copper resources in the Community, because Spain has a great deal of copper. Until that happens the unique status of the Avoca mine seems to suggest that the Community might look upon the mine as being a resource which might have a value out of proportion to its size and out of proportion to the present apparent commercial value of the resource buried in the ground. For all I know, it might be a more reasonable use of resources if the operation were discontinued and left until the market improves, not in the immediate future but when a real copper emergency arose in which the Community had genuine difficulties in solving within its frontiers. In that event the livelihood and the future of the 230 men working there would be a major charge and obligation on us.

In that context I wonder whether the Minister and the Department have explored the possibility of the Community taking up the burden of this mine and making an assessment of the sensible thing to do with it from the resource management point of view. The Community [979] might make funds available, if they have an appropriate basket of money from which such funds can be drawn, to supply an alternative livelihood for the men who would find themselves redundant. I am the first to see that this suggestion is very general and vague. This suggestion presented itself only because the mine has a certain unique quality in the Community and I would like to know that the Department have explored the possibility of driving that point home to the Commission to see if some help could be given to reduce the weight of the burden which this House is now being asked to carry through this Vote.

Apart from that this party have no objection to continuing the help to the operation. We are glad that it will be kept under continuing scrutiny and we hope that the optimistic projections the Minister referred to will turn out to be justified.

Mr. B. Desmond: I welcome the Government's decision to provide these moneys. They will go a very long way towards maintaining the operations of the Avoca Mines for at least the next two or three years. I am being careful to omit any reference to maintaining the viability of the mine because it depends so much on the international price of copper concentrates. As the Minister rightly said, that is an open question.

We have the very fortunate coincidence of the availability of the consultants' report commissioned by the Minister and the simultaneous rise in the price of copper concentrates on the world market. If we had not had the current experience of a very substantial increase in world copper concentrates prices as of now, the viability of what is proposed might be brought into question. However, the coincidence is there, and it is very much to be welcomed. It is a matter of profound relief to the 200 employees and the management staff of the mine that for some considerable time at least the general operations of the mine can continue. We should not underestimate the capital contribution, what one might even call the write-off [980] contribution, which is now being made by the State. It works out at anything up to £22,000 per employee being pumped into the company in the context of writing off debts and providing the essential funds for future working.

Perhaps no mine in the history of the State has received greater attention from the public servants responsible in the Department of Industry, Commerce and Energy. No mine in the history of the State has received more attention from a long succession of individual Ministers. I recall having long discussions with the previous Minister, then Deputy Keating, and trade unions and management staff, when the mine faced a crisis during the period of the previous administration. There is no absolute assurance that it could not face another crisis in the period of office of this administration over the next two-and-a-half years. All of the Ministers and the senior staff of the Department have bent over backwards down through the years to help this mine to maintain its general working operations and its employment continuity. Deputy C. Murphy, Deputy Kavanagh, Deputy Timmons and I often met the workers concerned and had long and intensive discussions with the management staff concerned.

On the basis of current high levels of concentrate prices, it may well be that in recent months the mine had some operational surpluses. This is to be welcomed. I would hope that surplus position would continue for the remainder of the year and that the mine might have some additional working reserve, and that the Department might not be too harsh in insisting on immediate repayment of operational surpluses to offset the State injection of funds. I gather things have been going quite well particularly in the past two or three months, and that is to be welcomed. It depends very much on world price levels in the copper market. The general development is good and the prospects for the remainder of this year seem likely to be solid from reading the financial press and trying to assess the markets.

I should like to express some concern about the manner in which the assistance [981] is being given. The Minister said it is expected to be possible to defer certain projects for which a net provision of almost £500,000 was made in the main Estimate. It is not inappropriate to ask what they were. If I were a member of the Committee of Public Accounts I would be asking that question. Money is going from the main Estimate to support the operations of a mine which has had a long history of financial problems, and inevitably that question will come up. The Minister may also wish to elaborate on that. Admittedly the £478,000 goes towards the general total of £4.35 million to support the operations of the mine. It must have posed some considerable difficulty for the Department to build up a package of this nature from the main Estimate and the Supplementary Estimate. As the Minister said, we have the new precedent of making funds available directly from the Vote.

I remember the current incumbent nearly having a seizure when the former Minister, Deputy Keating, brought in anything unusual. Perhaps it is poetic justice to say to him now that he is not above adopting an unconventional approach when it comes to funding certain operations. I do not necessarily disapprove of that, but he would have had an apoplectic seizure two or three years ago if the former Minister had introduced a proposition of this nature and we would have had a rare display of Limerick selfrighteous indignation at a proposition such as that which was put to us so calmly here today by the Minister of State, Deputy Hussey. It is no harm to point that out to the present Minister, and perhaps he will appreciate some of the problems with which his predecessor had to cope in assisting industry and particularly a difficult industry such as this. I make the point in the context of the procedure for making these funds available.

In conclusion I would make one point about the consultants' report. It may be possible to make it available—indeed it may have to be made available ultimately—to, say, the Committee of Public Accounts when they do their prolonged examination in three or four years' time. There is not a great deal [982] about Avoca Mines that is not generally known anyway. One would not need to be a mining financial expert to be able to read between the lines of the published data relative to this company. They have had so many consultants and so many examinations that the data available has had the most exhaustive examination in the world, bearing in mind their relatively small size and the history down the years.

In the national interest, if we are voting £4.35 million—admittedly a lot of it retrospectively in write-off—it is arguable that the consultants' report should be made available subject to the normal commercial criteria relating to aspects of confidentiality. There is no reason why that report should not be made available in the Houses of the Oireachtas. I put that to the Minister because he too waxed eloquent as to why consultants' reports should not be made available, so he might as well be fed with the spoon with which he belted the former Deputy Keating over the head in relation to aspects of Votes of this nature.

I welcome the decision of the Government to provide this financial assistance. The trade union of which I am a member are also pleased that the Minister and the Government have seen fit to provide this money. The management are not only relieved but pleased that this has been possible. Should international prices maintain their current high levels, I hope that the State will proceed to recoup some of the funds invested in this venture. The State funds invested over the years have been very considerable relative to the size of the operation and in that sense we are entitled to a substantial return should the mine now proceed to give us at least a year or two years' monthly surplus on operation of accounts. These are my comments. The Labour Party welcome the decision of the Government in this.

Mr. C. Murphy: It is not my intention to delay the House very long on this matter. I recollect speaking on a motion that the Minister introduced last June when he was very pessimistic about the future of the mine. Prospects were grim [983] at that time and the outlook was bleak for the workforce and also for management. I expressed my hope then that the feasibility study which the Minister was commissioning would produce sufficient optimism to enable him to bring in legislation such as we have at the moment which, in effect, is voting £4.35 million to Avoca Mines Limited.

Naturally, I am pleased that the job situation there will be continued. That is vital to that area, and I am very satisfied in the circumstances that an exceptional arrangement has been made between Avoca Mines Limited, the parent Canadian company and the Minister. I have confidence that that trio and the workforce there will be able to implement the various factors of the agreement. I know that the mine is marginal at the best of times and this is a huge amount of money, but I hope that this agreement will generate sufficient profit to enable the State to recover a substantial portion of the funds which will be voted here today.

The price of copper fluctuates greatly. The grim prospect has departed for the moment, but everybody in the area is aware that the matter must be kept under review, and it is being kept under review. I welcome that and I am pleased that there is a note of optimism now in that area, an optimism which I thought was beginning to disappear and perhaps had been nearly quenched last June.

Deputy Kelly reiterated a point which I mentioned last June and I reiterate it now. The Minister is only to aware that this is the only copper mine in the EEC. The Minister, when he replied to the debate last June, mentioned that he had gone into all aspects in discussions with the EEC and the various authorities over there to see what funds could be made available for the mine. Nevertheless, I hope that the Minister is continuing to press upon them that this resource that we have is the only copper mine in the EEC. It is marginal, and continuous difficulties will arise between the margin of profit available, between the cost of securing a ton of ore and the price realised for it. Nevertheless, it is very satisfactory to come in here and congratulate [984] the Minister on having the courage to deal with this matter in a very humane way. I know the difficulty of finding alternative employment in this field in that area. Mining in general can be extremely hard and it is marginal. This mine is particularly marginal because of the low grade of copper. Certain happenings in world market trends have enabled the Minister to take this step. I wish well to all involved in this programme and say “comhghairdeas” to all involved.

Mr. Clinton: When it comes to finding employment for people or keeping them in employment, this House would always be concerned to support any effort that would have such effect. It takes an extreme effort to keep in excess of 200 people in employment for as long as is possible. We are talking about a very substantial sum of money and are taking a very great risk. Everything that is said in that part of the consultants' report that we have seen and everything contained in the Minister's statement indicate that the Minister is telling the House that we want to spend this money but we see no future in so doing. That is what is conveyed to me in the Minister's message today.

Deputy B. Desmond appealed to have the consultants' report made available to the House. In what the Minister had to say we got very little from the consultants' report except in relation to prices and their effect on the viability of the mine. It does not say anything at all about an estimate of possible quantities or how long they are likely to last. We know that the quality is low grade, but the information contained in the report is all in relation to viability depending on price in the future. There is some mention of the known quantities of copper and that there should be a concentration on getting those known quantities out in the next four years. It is very difficult to see anything in that report or the Minister's statement to give us confidence that the mine will continue for the next four years. It is obvious from what Deputy C. Murphy has said that the Minister has tried to obtain EEC support for mining copper in Avoca and that so far he has failed. I assume he [985] would not have failed had he been able to produce sufficient evidence that there was a prospect of getting anything worthwhile from that mine.

It is very difficult to understand the thinking in the Department of Industry, Commerce and Energy when they recommend to this House that a very substantial amount of money should be invested in what is regarded as a lost cause, while at the same time our tanneries and timber processing industry— the chipboard factories—are allowed to close down. That seems to me to be quite inconsistent. We know we have the raw materials in those two cases. We know that these industries can and should be kept going. Yet we do not support them and make such a decision. In this case the Minister cannot hold out any prospect of viability over any worthwhile period in the future. What both the Minister and the IDA should be doing is endeavouring to find alternative secure employment in this area. It is obvious from what the consultants have told the Minister and from all that is known about the mine and mining generally that the prospects in this case are very poor indeed. It is difficult to understand why some industries are abandoned when their prospects are good when, in the case of an industry looking rather hopeless, we continue to give substantial support.

I am sure the Government have not made this decision without looking very seriously at the consequences. The first serious thing to happen will be that something in excess of 220 or 230 people will lose their employment if the mine closes down. However, the Government must see a vague prospect of keeping these men in employment and of the mine remaining viable for a few years ahead. I know they would not come in here irresponsibly and say “Look, we have got to spend this even though we see little or no prospects” and in other cases allow industries to close down.

We have received the minimum of information. I do not know what information is available to the Government. Perhaps they have something more to encourage them than what is contained in this statement. Certainly, there is very [986] little there making for the sort of confidence one would like to see in the future of the operation. I should like to support any prospect of maintaining employment there. If it does nothing more than keep people in employment, without making profits over and above to compensate either the Government or the concern involved, it will have achieved a satisfactory goal.

It would appear from the difficulties encountered in getting people to undertake this mining operation that all the experts, from whatever part of the world they may come, do not see very great prospects. I discern a feeling on the part of the Government that the future is bleak. Now is the time for the Government to be concerned about finding alternative employment opportunities for the people at present engaged there, if and when this mine has to be closed down. From what is said in that report, it appears that that day is not too far ahead. That is where efforts should be concentrated from now on. The decision has been made to spend this very substantial amount of money. Obviously, it is gaining the support of people in this House and I shall lend my support also. But it places on the Government an obligation to look seriously at the future, to try and find a means of employing these people if and when the mine closes down, because that is what is envisaged in everything I have read.

Minister of State at the Department of Agriculture (Mr. Hussey): I should like to thank Deputies for their contributions to and support for this measure which we all accept as being necessary at this time.

In answer to Deputy Kelly's criticism of the absence of the Minister and of his two Ministers of State, I should say that both Deputy O'Malley and Deputy Burke are out of the country on business at present and that Deputy Geoghegan-Quinn is suffering from laryngitis. Therefore I am sure Deputy Kelly will accept that it is not possible for particular Ministers to be present at all times when business of this type is being moved in the House.

Mr. Kelly: Of course, I am sorry.

[987] Mr. Hussey: Deputy O'Malley is in London on an industrial promotions trip and Deputy Burke is in Brussels for the multilateral trade negotiations. I shall merely answer some points made by Deputies, because I am sure they will accept that this is not my brief and that I am merely standing in for my colleagues.

First of all, Deputy Kelly is correct when he says that Avoca is the only copper mine in the EEC. We have pressed and will continue to press the EEC for any help or support we can get in the operation of that mine. I do not know whether or not that is possible, but certainly we shall continue to press that matter. During the past two years metal prices dropped very sharply and recovery has materialised only in very recent months. For instance, early in 1977 zinc was priced at 800 dollars per ton. Only recently did it come back to that level, having dropped to almost 600 dollars per ton. When one takes account of inflation in real terms that means that the current price is less than it was two years ago. Apart from the copper price factor, the low copper grade of .7 per cent being mined at Avoca is the biggest single factor militating against profitable operations there. In the climate which has prevailed over the last two years, expansion of the mining industry was not possible. Indeed, we are fortunate that Irish mines were able to keep in operation. Prospecting by mining companies has continued at a high level over these difficult years and there are indications of a general improvement in the mining scene internationally. Therefore the Government are hopeful that the Irish mining industry may now be over the worst and that we can look forward to a situation in which the operations and conditions of the existing mines will ease, with some expansion being possible in some areas of the industry.

Reference was made by Deputy Kelly to the Minister's request that every effort be made by all those involved to ensure that this mine be kept viable. The Minister has indicated already that, if forthcoming, support for this mine would have to be conditional on there being the possibility of a viable operation. [988] This is reasonable. It should be the responsibility of all the agencies involved, the workers, unions, management and the Government to ensure that they are working towards making this operation viable.

Deputy Clinton mentioned the prospects of viability in the future. The programme outlined in the consultants' report is based on known ore reserves, that is that there is a reasonable certainly as to the tonnage and grading of ore available over the next four years. There are further reserves in the Avoca Mine area but they are largely in the unproven or possible categories. Estimates about such reserves are based mainly on geological inference and considerable exploration and development work would be required before the extent of additional tonnage of ore and the trading of such ore could be established with an acceptable degree of confidence. At this stage I would not rule out the possibility that funds may be available at some stage for the exploration and development work necessary but that does not form part of the plans at this time. It is far too early to say whether the trend in copper prices when set against the general economics of production at Avoca will turn out to be favourable enough to realise even the limited objectives of the current plan. As far as the future plans are concerned we have to wait to see how things go. We will have to try to keep our options open and monitor the progress at the mines which we hope will advance as a result of this injection of capital.

Vote put and agreed to.