Wednesday, 9 May 1984
Dáil Eireann Debate
Mr. O'Malley: asked the Minister for Energy if there has been any request for equity injection, loans, guarantees or other financial investment or support by the Government in Bula Mines Limited; and if so, the nature and extent thereof.
Mr. O'Malley: asked the Minister for Energy when negotiations taking place between his Department and foreign companies with a view to getting the Bula ore body into production are likely to be completed.
In reply to another question yesterday the Minister of State, Deputy Collins, indicated the total State investment in Bula Limited to date is £10.25 million. This total included two loans totalling £665,257 advanced in 1983-84 to the company which were related to the fact that certain negotiations were in progress at the time for the development of the Bula ore reserves. The first of these loans was approved by the Government in October 1982 and the second in July 1983.
The moneys were advanced out of subhead L, State Support for Mining Operations, of the Department's Vote. It was under this subhead, which has been a feature of the Department's Estimate for some years, that aid amounting to £12.73 million was provided for Avoca Mines Limited. Opportunities for the examination of expenditures under this subhead will arise in the normal course as for any other expenditures approved by the Oireachtas.
Discussions are currently in progress between Bula Limited and a number of major mining interests. My Department are not directly involved in the negotiations which are primarly a matter for the management of the company. However my Department are keeping in close touch with the discussions which are expected to be completed shortly. For reasons of commercial confidentiality, and to protect the interests of the enterprise in question, it would be entirely inappropriate for me at this stage of the negotiations to provide further information. There will, of course, be opportunities later to provide information to the Oireachtas when it is relevant and appropriate to do so.
Mr. Spring: On the question of loans to the company, there are two loans, one approved by the Government in October 1982 and the second in July 1983. I have said in my reply that there is a question of commercial confidentiality in relation to disclosing the situation with regard to loans to the company. I am sure that the Deputy is well aware, from his occupancy of the Department of Industry in previous times, that from time to time commercial decisions have to be made. These loans obviously were made on the basis of commercial criteria and it was felt by the Government of the time that it was in the best interests of our stake in Bula Mines that these loans be promoted. I assume that the same decision making  process was engaged in by the Government in October 1982, also.
Mr. O'Malley: Whatever decision the Government may have come to in October 1982, when I was not present, having resigned at that stage, no payment was made in 1982 and no payment, according to the Minister of State yesterday, was made in 1983 until December of that year and January of 1984. Therefore the decision actually to make the payment does not seem to have arisen until last December. Neither I nor anybody else can tell the reason for that payment being made in December 1983, when the circumstances obviously were very different from those pertaining in October 1982. Accordingly, could the Minister tell us, without going into detail, the general nature of the reasons for the further payment of between £665,000 and £700,000 to this company?
Mr. Spring: I accept the Deputy's remark and was not implying that he was partaking in the decision-making process in October 1982. It was on foot of a Government decision taken in October 1982 that, in view of negotiations taking place at that time by the company in question, the Government felt that they should make a loan and approve the loan being made of the sum in question. The negotiations have been continuing since. I have said in my reply that obviously from the Government's point of view we should like to see negotiations being completed so that work can take place in relation to the substantial ore body in this location. I believe that it is in neither the company's nor the Government's interest at this stage to say further, but as I have told the Deputy, at a later stage when negotiations have been completed I shall certainly be willing and determined to make all the information known to the House and lay it before the Houses of the Oireachtas.
Mr. O'Malley: Would the Minister inform the House whether or not the State acquired any further rights when they lent this further £700,000 approximately, on top of the rights which they  have under the original agreement under which they paid £9.54 million in 1977 for 24 per cent of the company. Did they acquire any additional rights for the additional money put in?
Mr. O'Malley: Would the Minister not agree that it seems commercially very foolish for the State to have at the end of 1983 and the beginning of 1984 put substantial further money into this company whose only achievement since the passing of the Bula Act, 1977, seems to have been to acquire mountains of debts which now total £23 million?
Mr. Spring: As I said to the Deputy, decisions will have to be made from time to time on the basis of commercial criteria and a decision will have to be made in relation to the future of the ore body. It is in everybody's interest that the ore is extracted from the ground and sold at commercial prices so that the State can get a return from its investment. That is the intention. I assume the same commercial criteria were applied to the Government decision of October 1982 as were in the decision of 1983.
Mr. O'Malley: Would the Minister not agree that, in view of the very large sums of public money that were put into this company more than seven years ago, it would now be in the public interest if the State, when putting in further money, as it has done in the last few months, assumed control of the company in order to ensure that the situation that all of us would wish to see, the extraction of ore, could at least commence after eight years, the company in which the State has a minority interest having abjectedly failed over a period of eight years to extract even one ounce of ore?
Mr. Spring: The Deputy talks about large sums of money. I would remind the Deputy, as I said in my initial response, that in fact £12.73 million was provided  for Avoca Mines in the course of its lifetime.
Mr. Spring: With respect, I did not interrupt the Deputy. The obvious interest of everybody concerned is that the ore is extracted from the ground and that the Government can get a return on their investment. From time to time decisions will have to be made on how that can best be looked after. Decisions have been made by both Government, by the Deputy's Government and by the Government of which I am part, in respect of delicate times when negotiations are taking place between Bula and outside interests and negotiations which we hope will bring to fruition the efforts to have ore extracted from this mine. As I said, for the moment decisions are made on the basis of commercial criteria.
Mr. O'Malley: Would the Minister not agree, as I have suggested already, that now that the State has seen fit, whether commercially wise or otherwise, to put more money after bad into this company, the only solution towards bringing about production is for the State to take control?
|Last Updated: 14/09/2010 09:32:53||Page of 43|