Economic Factors in Exploration
The approach to the problem of exploration is very often determined by local requirements and conditions; but if one were to come at the problem from a distance and to keep matters in broad perspective, the first step would be a consideration of what might be called the economic factors. Let us suppose that the geologist is free to choose his field of exploration. An obvious preliminary step is to eliminate from consideration mineral commodities which are not in steady or large demand and are much at the mercy of market conditions, or which are otherwise not well situated commercially. The underlying factors are many and complex. They include the present nature and future possibilities of foreign competition, the domestic competition, the grades necessary to meet competition, the cost of transportation, the cost of mining under local conditions—including considerations of labor and climatic and topographic conditions,—the probability of increase or decrease in demand for the product, the possible changes in metallurgical or concentrating practice (such as those which made possible the mining of low-grade porphyry copper ores), the size of already available reserves, and the mining laws in relation to ownership and regulation. Most of these factors are discussed at some length on other pages. After looking into the economic conditions limiting the chromite, nickel, or tin developments in the United States, the explorer might hesitate to proceed in these directions,—for he would find that past experience shows little promise of quantities and grades equivalent to those available in other countries, and that there is little likelihood of tariffs or other artificial measures to improve the domestic situation. Before and during the war, commercial conditions might have shown the desirability of hunting for pyrite, but more recent developments in the situation cast some doubt on this procedure. To go ahead blindly in such a case, on the assumption that the pyrite market would in some fashion readjust itself, would not be reasoned exploration. Again, in considering exploration for copper, account should be taken in this country of the already large reserves developed far in advance of probable demand, which require that any new discoveries be very favorably situated for competition. In oil, on the other hand, a very brief survey of the economic factors of the situation indicates the desirability of exploration. The comparative shortage of lead supplies at the present time suggests another favorable field for exploration.
In short, before actual field exploration is begun, intelligent consideration of the economic factors may go far toward narrowing the field and toward converging efforts along profitable lines. Looked at broadly, this result is usually accomplished by the natural working of general laws of supply and demand; but there are many individual cases of misdirected effort, under the spell of provincial conditions, which might easily be avoided by a broader approach to the problem.