Conference program

November 23, 2011
Session 3
9:00 a.m.

Public geoscience for private exploration
Murray Duke (Ottawa, Ontario)

The function of a geological survey is to ensure the availability of the geoscience information that government needs to promote the public interest. This occurs mainly in two contexts. First, surveys provide geoscience to inform government policy decisions. Second, they provide information as a public good to support decision-making by the private sector, civil society, and the general public. Among the most important examples of the latter is the public geoscience used by industry to carry out mineral exploration. This involvement of government in the market is predicated on three considerations:

1. the fact that most mineral resources (in Canada) are public assets, which conveys a duty of stewardship upon government;
2. governments have determined that the responsible development of these resources is in the public interest;
3. much of the relevant geoscience information has the economic characteristics of a public good, which argues for a government role in providing it.

Public geoscience attracts exploration investment by allowing industry to identify areas of favourable mineral potential. Accordingly, the quality of public geoscience is an important determinant of the climate for exploration investment. It is often said that government’s investment in public geoscience stimulates five times as much in private exploration investment. Although this is a reasonable “rule-of-thumb”, it is not the most important consideration. The more important impact of public geoscience is in improving the efficiency and effectiveness of private exploration. By reducing exploration costs and risks, public geoscience not only improves returns on private investment but also increases revenues accruing to governments as royalties and taxes.

The long term global trend of increasing discovery costs indicates that mineral exploration in many areas has reached the point of diminishing returns. In other words, exploration is becoming less cost-effective. Public geoscience can mitigate this trend. Going forward, discoveries will of necessity increasingly be made at depth. Geological surveys can help improve the cost effectiveness of deep exploration by putting greater emphasis on mapping the third and fourth dimensions.