Minister O'Dowd launches Indecon Report

Fergus O’Dowd, the Minister of State with responsibility for Natural Resources, has published a report by Indecon International Consultants assessing the value of Ireland’s mining and mineral exploration sector.

In 2012, Ireland was Europe’s largest producer of zinc metal in concentrate (32% of all European zinc mine output, inclusive of the Russian Federation) and the 10th largest producer in the world (2.5% of world output).

The report – “Assessment of Economic Contribution of Mineral Exploration and Mining in Ireland” [pdf,1.41MB] – was commissioned by Minister O’Dowd to secure independent sectoral information to support minerals policy.

“This review is critical in evaluating the economic impact of the sector to the Irish economy in the here and now, with a view towards the maximisation of its contribution in the years ahead,” said Minister O’Dowd.

“Ireland needs strong, competitive industries that punch above their weight in the international arena. The Irish Mining industry, as a significant global player in terms of zinc and lead output, is clearly one of those,” he added.

The report provides an up-to-date overview of the Sector and the contribution of the Irish zinc and lead mining industry in global terms. “The central conclusion of the report is that the economic value-added contribution of the mining and mineral exploration industry to the Irish economy is considerable and far reaching,” said Minister O’Dowd.

Mining output in 2012, measured in sales turnover, was €426.1m. Taxes, royalties and other licence-related fees in 2012 approximated to over €65m.

The report estimated the “economy-wide expenditure impact” of the sector in 2012 at €809.7 million and found that the activities of exploration and mining companies directly and indirectly supported over 3,300 full-time, jobs in 2012.

“The data indicates that this highly-paid employment within the mining and exploration sector takes place in the regional economy making it all the more valuable at a local level, especially in the context of the high unemployment rates prevailing across many sectors of the economy at this time,” according to Minister O’Dowd. “Overall direct, indirect and induced employment is in the order of 3,306 jobs, 99% outside Dublin. This feature helps address the regional challenge for Government in job creation.”

The Minister stated that it is Government policy to support the search for, and responsible development of, further mineral resources so that these positive impacts can continue to be enjoyed in the future.

Summary of Report Findings

  • Output in Mining, As measured by sales turnover, amounted to €426.1million in 2012;
  • The activities of exploration and mining companies directly supported 1,373 full-time equivalent persons during 2012, while an additional 1,933 FTEs were supported indirectly as a result of multiplier impacts throughout the economy;
  • One of the features of the industry is the broad regional distribution of its workforce, with significant numbers of people employed in the Mid-East, Mid-West and South-East, as well as across other regions in the West and South-West;
  • Direct expenditure on wages and salaries for workers in exploration and mining amounted to €107.3 million in 2012. These expenditures also result in multiplier impacts throughout the economy, bringing the overall income impacts in the wider economy to an estimated €341 million in 2012;
  • Total expenditures by exploration and mining companies amounted to an estimated €313.2 million during 2012. The combined direct, indirect and induced impacts of these expenditures is estimated at €809.7 million;
  • The overall Gross Value Added contribution of the mining sector to the Irish economy is estimated at €274.2 million in 2012;
  • Exploration and mining companies contributed a total of €56.6 million in tax and other payments to the Exchequer and to local authorities during 2012. In addition, the State benefits from payments made by mining and prospecting licence holders in the form of royalties, licence fees and other payments. These receipts amounted to €10.6 million in 2011 and €9 million during 2012; and
  • In addition to creating and supporting jobs and expenditures at local level in Ireland, exploration and mining companies also contribute to local communities in the form of financial supports to community sporting and other organisations. According to the findings of Indecon’s research, mining and prospecting companies contributed a total of almost €460,000 to local community activities and organisations during 2012.

Mining Industry Outlook
In the course of Indecon’s research, the views of mining facility and prospecting licence holders were sought in relation to the future outlook for the industry as a whole. The majority of respondents (43%) indicated that they expect the industry to expand marginally (5-15% growth) in the medium term, while 14% believed that the industry has the potential to expand significantly (by 15%-40%). These views provide an insight into the general consensus among industry stakeholders about the future potential of the industry.

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