ABSTRACT
Historically the development of large mining companies grew out of important "discoveries" and the ability of the miners who discovered and explored valuable ore bodies to mobilize the capital for exploiting them. Successful mining firms tended to acquire other mineral deposits from prospectors who were unable to develop them. In the nineteenth century small U.S. prospectors were often able to sell stock in their ventures, and literally thousands of corporations were created, most of which failed or were absorbed by larger firms. After most of the obvious surface exposures of ore deposits had been located, exploration became more expensive. Techniques were developed that required large-scale operations to locate subsurface deposits and much of the exploration came to be concentrated in a few large mining firms. These firms also integrated forward into smelting and refining, processes which also required large amounts of capital with the development of new technology. Exploration, which is the foundation of the copper mining industry, is no longer dependent on prospectors who gamble their fortunes on finding a single commercial deposit, but has become systematic and subject to the same cost-return principles as any other in vestment. 1 In this chapter we examine the investment decision-making process as it applies to exploration, mining, and processing in the copper industry; the method of project appraisal; and capital costs and methods of financing.
