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The dynamics of relative attractiveness-a case study in mineral exploration and development [An article from: Ecological Economics]
Book Details
Author(s)B. O'Regan, R. Moles
PublisherElsevier
ISBN / ASINB000RQZIAY
ISBN-13978B000RQZIA2
MarketplaceFrance 🇫🇷
Description
This digital document is a journal article from Ecological Economics, published by Elsevier in 2004. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.
Description:
The high mobility of mining investment is often cited in the literature. Consequently, the concept of relative attractiveness is particularly important. In a free market, a mining firm concentrates its exploration investment in countries that present the most attractive investment opportunities. This creates a positive feedback loop in a particular country towards further exploration activity, until, eventually, some limit is reached, thus reducing this particular country's relative attractiveness. In times of steeply descending mineral prices, firms have shifted their investment to regions that are perceived to have more stable mineral policies, reflecting the fact that, in their opinion, these countries have become relatively more attractive as the firms themselves become more risk averse. This is an important point, as it shows that the concept of relative attractiveness is a dynamic concept. A government can control the mineral policy within its own boundaries but, all other things being equal, in order to remain competitive, policies must constantly evolve to reflect the changing dynamics in the mineral policies and prospectivity of other countries. This paper examines the dynamics of relative attractiveness and its impact on the decision-making processes which guide a mining firm's exploration efforts.
Description:
The high mobility of mining investment is often cited in the literature. Consequently, the concept of relative attractiveness is particularly important. In a free market, a mining firm concentrates its exploration investment in countries that present the most attractive investment opportunities. This creates a positive feedback loop in a particular country towards further exploration activity, until, eventually, some limit is reached, thus reducing this particular country's relative attractiveness. In times of steeply descending mineral prices, firms have shifted their investment to regions that are perceived to have more stable mineral policies, reflecting the fact that, in their opinion, these countries have become relatively more attractive as the firms themselves become more risk averse. This is an important point, as it shows that the concept of relative attractiveness is a dynamic concept. A government can control the mineral policy within its own boundaries but, all other things being equal, in order to remain competitive, policies must constantly evolve to reflect the changing dynamics in the mineral policies and prospectivity of other countries. This paper examines the dynamics of relative attractiveness and its impact on the decision-making processes which guide a mining firm's exploration efforts.
