16 APRIL 1977, Page 13

Gold rush, Irish-style

Peter Paterson

Dublin

A few years ago Mr Liam Cosgrave, the Irish Prime Minister, could say, with just a trace of self-pity; 'In this country we have few natural resources except arable land. Compared with other countries we have no great natural reserves of raw materials, nor minerals capable of exploitation.' How wrong he was. Landowners, prospectors, international mining interests and politicians are now squabbling over what is probably the fifth or sixth largest zinc lode so far discovered anywhere in the world. ft all lies beneath the pasture lands just thirty miles from Dublin, near the small town of Navan, Co. Meath.

With the deposits fully worked, Ireland would be able to supply up to two-thirds of the zinc used by industry in the whole of the Common Market. Export earnings would be worth an estimated £70 million a year. But rivalry over the ownership of land and mineral rights has delayed the extraction of the ore, and left potentially huge deposits untouched. The Irish government has recently stepped in, making a controversial deal with a mining company which has yet to turn a single sod on its claim—thought to contain more than

twenty million tons of high quality zinc and lead.

The ore-body extends over some 700 acres on the edge of Navan, a bustling little town which has been a centre for furniture manufacture since Huguenot times, and is divided by the River Blackwater. On one side of the river, the Tara Mining Company—owned jointly by several multinational corporations—has spent £85 million developing

one of the most advanced mines in the world. Its environmental planning and safety procedures are held up as an example by the European Commission, and it entertains a stream of admiring mining experts from all over the world.

Tara has started planting 70,000 trees to shield its buildings; and provided around a thousand jobs—attracting some Irishmen back from exile in England. Full production may begin by the end of April. The other side of the river is owned by the rival Buie Company, whose only visible asset is a couple of hundred muddy acres, and a virulent line in PR which is consistently aimed at Tara and all its works.

Although Tara is the offshoot of a syndicate of multinationals, and is therefore bound to be criticised as an alien exploiter of Irish resources, the Irish government nominates two of its directors, holds a quarter share, and is entitled to royalties. However, it is in Hula that the government is now proposing an investment that has stirred the cauldron of Irish politics and set tongues wagging all over Dublin. The government is seeking parliamentary sanction for a deal in which it would acquire 24 per cent of Bula's equity for nearly £10 million, although an independent valuation commissioned by the government itself assessed the whole of Hula as being worth less than ES million.

With a general election in the offing, the affair has provoked a debate that is rancorous even by the robust standards of Irish politics. Justin Keating, Minister of Industry and Commerce in the ruling Fine Gael Labour coalition, has had youthful Communist affiliations dredged up. In return, following allegations on television by Mr Keating, the chief Opposition spokesman for the Fianna Fail opposition, Brendan O'Malley, was obliged to admit holding shares in Tara while Minister for Justice in the previous administration.

The government deal with Bula, carefully backdated to protect it from Ireland's recently-introduced capital gains tax, means that the four principals of the company will share the £10 million tax free, without any publicly-disclosed guarantee that they will even go ahead with the exploitation of their mine. Indeed, Mr Keating has adamantly refused all demands that the agreement with Bula should be made public, and at one point remarked, `Even if the minerals are left in the ground, our participating interest will remain to bear fruit at some later stage.'

They have already borne fruit for the men behind Bula. One of the directors, Mr Patrick Wright, died last year, leaving, it was reported, more than £6 million to be divided between his widow and nine children. Legend has it that Mr Wright, who farmed 120 acres at Navan, unwittingly discovered the hidden wealth beneath his land ten years ago when his cattle began to keel over and die from lead poisoning. Other versions, in the Irish style, give the credit to some electricity board linesmen boring holes for power lines, or to the Irish Geological Survey whose findings were simply culled from a government publication on open sale at the Stationery Office.

What seems clear is that the presence of zinc in huge quantities was proved by Tara Mining, who, through underestimating Mr Wright's shrewdness, failed to part him from his land. An Irish syndicate, led by industrialist Tom Roche and his son-in-law Michael Wymes, suddenly appeared on the scene to make Mr Wright an offer he could scarcely refuse : £500,000 for his farm, plus a block of shares in the company that was set up the following day, a royalty on earnings, and a directorship. One Labour member of the Dail, James Tully, described it as 'the most blatant piece of claim-jumping known in the mining world for more than a hundred years.'

A court action brought by the government toclaim the mineral rights to the Wright farm for the state, under a 1940 law, was thrown out by the Supreme Court. But while Tara pressed ahead with their mine, Bula have continued simply to sit on their claim. About the only sign of activity is a Portakabin parked at the bottom of a muddy lane, a symbol of action to come—perhaps. For it is highly doubtful whether the company's plans will receive planning permission. Bula apparently intends a quarry-type, opencast operation, but it is less than a mile from Navan town where people are worried about noise and lead particles in the air. An even greater obstacle is the effect that blasting might have on Tara's underground mine across the river.

Meanwhile, back in Dublin, the row has

centred on the government's financial link with the reluctant miners of Bula. Mr Keating's wall of secrecy over the deal was embarrassingly breached by the Irish Independent, which revealed that independent assessors commissioned by the government had put a price tag of £7.75 million on Bula, which implies that the price that should have been paid for a 24 per cent stake (in addition to a `free' 25 per cent ceded to the state by both concerns) was only £3.8 million.

It is true that a number of other wildly irreconcilable valuations, one as high as £106 million, had been placed on the company by different consultants, but this was the one that emerged as the clincher as far as the government was concerned. Why, then, was it not followed? At first Mr Keating fell back on the diversity argument. Then he suggested that it was merely a negotiating figure, `the equivalent of striking an attitude in a horse-buying situation.' This aroused the antagonism of the assessors, who repeated that £7.75 million was the value—lock, stock and barrel—that they placed on j3ula.

Surprisingly, in view of all this, the government still had some apologists. By backing Bula, it was said, they acquired a means of exerting pressure on the multinational Tara to make generous concessions, including board representation. But the government directors are on the board of Tara Mines only, and that company is controlled by Tara Exploration and Development Inc., of Toronto, which in turn is dominated by such giants as Noranda Mines, Cominco (a subsidiary of Canadian Pacific), and the British-owned Charter Consolidated, over none of which the Irish government have any control.

Bula eagerly makes capital out of Tara's foreign connections, promoting itself as `The Irish natural resources company in which you [presumably the taxpayer, for it is a private company] have a stake.' The feeling in Dublin, however, is that all the manoeuvring, including the failure to start mining and the acquisition of the government stake in Bula, points in only one direction : when the price is right, Bula will sell out to Tara, for whom it makes sense to extend their mine under the river to exploit what is part of the same rich ore-body.

Meanwhile, the corporate vendetta is pursued by the two other companies with a vigour rivalling the epic fistfight between John Wayne and Victor McLaglen in Ford's Irish classic The Quiet Man. And by that token, the government is stuck with the Barry Fitzgerald role, shouting on the sidelines. Even the names Bula and Tara have the authentic Hollywood-Irish ring. All that's missing is Maureen O'Hara, and any trace of schmaltz.