Abstract

Mining investment and competitiveness depend mostly on two variables: the institutional framework and the geological maturity. Particularly, the geological maturity depends on the combined effect between positive information spillovers, and the negative effect from the depletion of exploration opportunities. Using copper and gold discoveries, we estimate geological maturity as the effect of discoveries on early-stage exploration expenditures. Results suggest that each additional copper discovery has an effect that is not different than zero, signaling that information spillovers and depletion effects are balanced. On the other hand, each additional gold discovery has a positive and significant effect, suggesting that information spillovers still dominate over the depletion of exploration opportunities.