Department’s legislation blunder puts new minerals drilling on hold

Minister Denis Naughten.
Minister Denis Naughten.

New drilling for minerals in Ireland is on hold because of a foul-up in the drafting of legislation, the Irish Independent has learned.

The situation has led to an effective moratorium on new drilling permits for mineral explorers.

The Department of the Environment, headed by Minister Denis Naughten, is racing to solve the problem which is causing delays for companies operating in the sector here.

“A matter has been brought to the department’s attention. The department has engaged with the relevant Government departments/offices and a remedy has been prepared to resolve the issue and is in the process of finalisation.”

It declined to specify the exact nature of the legislative problem, but is aiming to get it solved in a matter of weeks.

Permitting falls within the purview of the Exploration and Mining Division within the department.

The minerals sector here has seen a substantial uplift in activity in recent years, particularly when it comes to exploration for zinc. Market prices for the commodity are substantially higher compared to two years ago. However, prices had their worst quarter since 2015 in the second quarter of this year.

Expectations of a rise in zinc concentrate supplies in coming years have driven the price down.

Last week, Wood Mackenzie analyst Jonathan Leng said he expected supplies of zinc concentrate to rise by 300,000 tonnes in 2018, 900,000 tonnes in 2019 and 1.25 million tonnes in 2020, but he says this will not mean a swift surge in supplies of the refined metal.

“With little new smelter capacity being built in recent years outside China and the construction of new capacity in China having slowed dramatically, refined production may be constrained by smelter capacity,” Mr Leng said. “Limiting the build-up of metal inventories, this would provide support to the zinc price,” he said.

Ireland is one of Europe’s largest zinc producers on the back of the large mine in Navan, which is operated by Swedish firm Boliden.

Glencore, a giant of the industry, is active on a prospect at Pallas Green in Limerick, while a number of junior explorers have also boosted their activity.

One of those, Group Eleven Resources, recently completed a stock market flotation. (Additional reporting Reuters)

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