The Lisheen mine, under construction by Ivernia West, will start production by September 1999 with a planned shipment of 30,000 tonnes of zinc concentrates by the year's end.

Speaking at the company's annual meeting in Dublin yesterday, chairman Mr David Hough said: "Lisheen will be one of the largest zinc mines in the world, and the first in Ireland to have an integrated pollution control licence under new regulations due to come into effect in September. Already 70 per cent of the expected production has been sold in advance in a five-year timeframe and we are close to reaching an agreement with the unions."

The company board, however, came in for criticism from one shareholder who asked why the company had not foreseen the problems with water in the mine which cost the company £14 million to deal with.

Mr Hough said "the company undertook extensive studies to check the size of the aquafer (water-bearing rock) and we were baffled by the actual size of it when we went underground. But even if we had known, we would still have to pay the same amount to overcome the obstacle."

Ivernia also announced that it was investing in the Magellan Lead Project in Western Australia initially investing $3 million (€1.9 million) for a 20 per cent interest in the project with the option of acquiring up to 60 per cent.

The company says the resource is a uniquely pure and shallow base metal deposit with an initial mineable tonnage of 8.2 million tonnes which is sufficient to establish a nine-year mining operation.

Commenting on the merger of Minorco, Ivernia's partner in the Lisheen mine, with Anglo American Corporation of South Africa, chairman Mr Clayton Love jnr said: "Anglo American plc is a world-leading mining and natural resource company and already held a 75 per cent interest in Minorco. The merger will have no direct impact on our joint operation at Lisheen and we look forward to continuing to work with our colleagues in Minorco and Anglo American."