A legal action by Tara Mines to recoup some £60 million (€76 million) from the Exchequer was rejected by the Supreme Court yesterday. It ruled that, under current legislation, the company's "above ground" processing operations at its Navan mine were part of its "mining operations".
The money sought related to corporation tax assessments for January 1978 to December 1988 and already paid to the Revenue.
Tara, owned by Finnish multinational Outokumpu, claimed it was entitled to export sales relief on goods "manufactured" for export on the basis that its only income came from the sale of the lead and zinc concentrates extracted from the mine and processed above ground.
Having mined the ore underground, the company claimed it was then subject to an elaborate process during which concentrated lead and zinc was obtained and taken to Dublin for export abroad.
Tara appealed its corporation tax assessment. The Appeal Commissioners found the company did not sell its mining output but subjected it to a manufacturing process and then sold it. The commissioners decided Tara derived its income from the sale of the concentrates and was entitled to export sales relief.
The Revenue successfully appealed that finding to the High Court. Yesterday, the Supreme Court rejected Tara's appeal against the High Court ruling.
Mr Justice Murphy, giving the Supreme Court's judgment, said, having regard to the desperate need for industrialisation that might create wealth and give employment on one hand and the highly speculative nature of finding commercial quantities of metallic ores in this State, it was not surprising that legislation was enacted granting tax concessions to those who succeeded in operating a mine.
The Appeal Commissioners had been unable to provide any definition or description of the term "mining operations". The question was whether "mining operations" included the process undertaken in relation to the raw materials.
Tara argued it was the final link in an integrated business and not the original mining or intermediate steps that provided the firm's income. A company spokesman would not comment on the outcome.
