Resource potential and the economic assessment of extractive industry projects

Calculating the economic viability of deposits

In many partner countries of German Development Cooperation, the mining industry has been identified as a driver of sustainable economic development. In most cases, the national mining authorities are responsible for the development and governance of this sector. However, many of these authorities lack the requisite capacities to assess the economic conditions and impacts of sector development.

This is where the toolkit starts, which was developed within the framework of the Sector Programme Extractives and Development. It provides mining authorities with a method for conducting an economic assessment of mineral extraction projects, at an early stage in the development process and during the evaluation of the feasibility of the mineral resource project.

The toolkit can be used during a resource potential analysis, in order to assign a monetary value to mineral resources, which have been discovered or which are believed to exist. It can also be used prior to publication of tenders, in order to estimate the value of the extractive industry project and the government revenue, which it is expected to generate. During the production of the feasibility study, the toolkit can be used to check the plausibility of the economic analysis.

In 2016, the toolkit was piloted successfully as part of the BGR’s Mineral Resources for Development project in Tajikistan’s Main Department of Geology. After two training courses with the Department’s Working Group on Economic Geology in 2016, the project partners are making successful independent use of the toolkit in order to conduct new economic assessments of known resource deposits.

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