The Economics of Foreign vs. Domestic Mineral Exploration

The rapid worldwide increase in labor costs, prices of goods and services, and the rising tide of economic nationalism do not bode well for the future of mineral exploration and the mining industry. The increasing complexity and difficulty involved in finding economic mineral deposits makes these trends particularly significant. A comparative cost analysis of domestic and foreign exploration projects which developed into mines during the period 1960-74 may be useful in indicating the general nature of exploration expenditures as these trends continue. This analysis is based on a survey of 18 US and Canadian mining companies. Due to the inexact nature of exploration expenditure data, plus the fact that no two mining companies follow the same system of cost allocation, the results of the survey must be considered quite general in character.