Brexit – How will it affect the Extractive Industries in Ireland?
“Unavoidable” is the first thought; one can’t avoid exposure to the “B” word and it seems all-encompassing in the media, in business and political circles.
What it may mean for extractive industries in Ireland is interesting, made more complex because of the two jurisdictions on the island.
Mining & Metals
Turning first to base metal mining, currency fluctuations have always been important, as revenue for base metal concentrates is in US Dollars while costs are in Euro; the intricacies of the Dollar-Euro-Sterling relationships resulting from Brexit issues are complex, but a strong Dollar as currently experienced is generally good for Irish base metal production- now confined to Tara Mines in Co Meath. The same is true of gold production which is confined at present to a modest output by Galantas in Northern Ireland. With the development of the Curraghinalt project, a strong Dollar gold price will be beneficial, as will a weaker Sterling.
The Sterling – Euro exchange rate is central, as weaker Sterling makes UK products and services more competitive. This effects aggregates, industrial minerals and cement supplies. Products and services from the UK are cheaper post the Brexit launch of June 2016 , putting pressure on RoI companies. Aggregate exports to the UK from the RoI are limited, while those from Northern Ireland are priced in Sterling.
A stronger Euro effects delivery of professional services to the UK and makes UK providers re-examine the Irish market. Of course, several UK based consultants have had Irish subsidiaries for many years; a question arises as to what extent free movement of staff can continue, post Brexit.
What to Expect
There is no clarity as yet as to how the border between the two parts of the island of Ireland will operate. A recent British Ireland Chamber of Commerce (BICC) Forum heard views from Irish Revenue that border posts with long queues of trucks need not happen; however many commentators believe some hardening of border mechanisms will be inevitable, as technological solutions alone will not suffice.
Like any other business threat, Brexit requires preparation. One very useful tool is Enterprise Ireland’s Brexit Scorecard at https://ambition.enterprise-ireland.com/prepare-for-brexit.
The accountancy profession and business associations such as IBEC, BICC and IEA publish useful updates on the topic. The Irish government seems well prepared, having ensured inclusion of Ireland’s issues on the EU negotiation agenda. Cross Departmental Brexit teams have been established; the Geological Survey of Ireland is represented on its Departmental group. Staff from Enterprise Ireland have been assigned to the Irish Embassy in the UK.
RoI/ NI Relationship Going Forward
The IMQS enjoys close relationships with similar professional and vocational organisations across the island of Ireland i.e. with the Institute of Quarrying , the Quarry Products Association (NI) , the Irish Association for Economic Geology and the Institute of Geologists of Ireland. In addition, the Geological Surveys in Northern Ireland and in the Republic of Ireland work closely together in providing island-wide data sets for society in general and for the extractive industries in particular. These links will survive and prosper post Brexit.
Moreover, The British Geological Survey and Geological Survey Ireland are members of Euro Geo Surveys – another link that will continue and strengthen.