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Natural Resources update: Irish mining activity remains robust
In view of the continuing strength of global demand for iron ore and base metals such as lead and zinc, mining activity in Ireland continues to attract solid overseas interest.
The latest industry information published on mineralsireland.ie (an industry-facing website maintained by the Irish Department of Communications, Energy and Natural Resources) confirms that the three Irish lead-zinc mines that were operational during the first half of 2012 accounted for approximately 44% of the zinc, and 24.5% of the lead, produced across the 27 EU Member States. In addition to the operational mines, more than forty exploration companies hold almost 600 Irish prospecting licences, which cover lead, zinc and a wide range of other minerals. The number of exploration licences issued by the Exploration and Mining Division of the Department is described as remaining “at a twenty year high”.
Mining and the law
Mining in Ireland is governed by sector-specific legislation that includes the Minerals Development Acts 1940 – 1999. While (unlike the situation in relation to petroleum) Irish law does not vest the ownership of all minerals in the Irish State, there is vested in the State the exclusive right to “work” minerals, regardless of who owns them. This right forms the basis for the grant, by the Department of Communications, Energy and Natural Resources, of “State Mining Facilities” to successful applicants, who may then work the relevant minerals in return for the making of financial payments (usually including both a fixed annual fee and a royalty payment related to tonnage).
In addition to this licensing role, the Department also serves as an authoritative source of information in relation to Ireland’s mining sector, as well as the island’s underlying geological characteristics, and disseminates this information to the sector primarily through the mineralsireland.ie website.
As well as sector-specific legislation, and in common with any major infrastructural project in Ireland, an Irish mining project will be governed by a number of general pieces of legislation related to planning, environmental and health and safety, among others.
Advising mining industry participants
The Energy and Natural Resources practice group at Matheson has significant experience and ongoing activity in advising mining industry participants in relation to (among other things) applying for Irish mining licences, fund-raising for mining operations, structuring and negotiating commercial and operational agreements including participation agreements, profit sharing agreements and ore sales agreements, and carrying out due diligence exercises in the context of merger/acquisition transactions involving Irish mining assets.