Why Mineral Exploration?

Why Mineral Exploration

The mineral reserves and resources, annual production vs. consumption and index of per capita spending of any commodity are the measures that rank the status of a country as developed, developing or underdeveloped. The per capita consumption of zinc in India during 2008 was very low at 0.43 kg against a world average of 4.3 kg. The higher consumption during the same period was shared between Australia (12.7 kg), South Korea (11.3 kg), Canada (5.6 kg), Japan (5 kg), USA (4.1 kg) and China (2.7 kg). The policy makers in the Government and Private Sectors allocate funds for long- and short-term exploration plan programs guided by the demand-supply trend of all commodities as a whole. The fund allocation has special significance for strategic and deficient minerals. The annual percent satisfaction between consumption and indigenous production of zinc metal between 1992-1993 and 2009-2010 at an annual growth rate of 8-10% has been depicted.

The existing demand-supply disparity can be reduced by expanding the mining and smelting capacity with the on hand ore reserves as short-term ad hoc measure. The ultimate way out for long-term standpoint would be continuous efforts to enhance reserve and resource base. This is possible by new search, discovery and adequate exploration of mineral deposits, economic mining and smelting.

The process of mineral discovery and its development to a target production center takes a long gestation period of about 5-20 years. In terms of business requirements, this translates to a very high-risk tolerance at all levels, extensive period of time and rich pockets for a sustained cash flow. A small business unit in this field may often end its brief tenure with a total loss, in case of failure to make an economic return. Indeed, many of the discoveries are not viable at current market prices. Prima facie, the facts might indicate that investment in these ventures is a waste. However, one discovery out of 100 or even 1000 attempts may pay back the entire efforts. The task of policy maker is to plan timely allocation of funds for exploration and technology research of various mineral types, predicated on long-term demand and supply scenarios. Therefore, an investment-friendly environment, transparency and will of the Federal and the State Government and exploration companies and the political commitment of the regime are essential for mineral development in any country.