- **Uganda:** Oil was discovered in 2006. Although production has yet to start, the government has borrowed in anticipation of future oil revenues. The public debt ratio has nearly doubled since 2007, reflecting loans from Chinese state banks and other lenders to finance large hydropower and other infrastructure projects. With production dates being postponed, infrastructure projects affected by cost overruns, and the current account deficit reaching over 10 percent of GDP in 2015, fiscal risks and external financing risks have increased (World Bank 2015f).

- **Mozambique:** The discovery of massive gas deposits in 2012 has lifted medium to longterm growth prospects. However, the sharp fall in oil and gas prices since 2014, delays in mining infrastructure projects and highly expansionary fiscal policies have generated major short-term challenges. Public debt ratios have risen sharply from 2007, to finance government infrastructure spending. But with finances under pressure, the country has turned to the IMF for financial support (IMF 2016).

# **IV. Data description and stylized facts**

The data set comprises proprietary data from MINEX Consulting on 960 global mining discoveries in copper and gold between 1950 and 2014. The copper discoveries data set contains data on 46 developing and advanced countries covering 273 discoveries. The gold discoveries data set contains observations for 73 developing and advanced economies, and a total of 687 discoveries.

In addition, data are available on the size and quality of the deposits (Tier 1, 2 or 3 deposits with Tier 1 deposits referring to the highest quality deposits based on criteria that include concentration of ore and size of find). These data are augmented by other data including country specific institutional and governance variables (democracy, fragmentation/conflict); macroeconomic variables (government debt levels, inflation, public sector and external balances) and other control variables (levels of GDP per capita) and World Bank Income Classification categories to identify countries that are low-, middle- or high income. It is important to note that although the data do not have right or left censoring issues as is typically the case with most duration analysis, the data sample does suffer from “right truncation”. In other words, the observation of a mine in the sample is conditional upon it having being developed to production during the sample period (which ends in 2014). Mines which have yet to be developed are not part of the sample.

Most copper and gold mines in our data set tend to get developed within the first 10 years following discovery (Figure 4). However, the lead time to production is shorter for gold discoveries (10 years, versus. 17 years, on average, for copper). Only 4.5 percent of gold mines in the sample remain in production for 30 or more years, compared to almost a third of copper mines in the sample. On average, there does not appear to be any discernible difference across gold mines of different sizes or quality.<sup>8</sup> In contrast, copper deposits with shorter lead times to production are more often those of higher quality (Tier 1) deposits. By region, the largest number of discoveries in our data set is located in the Americas, Africa, Australia, and among Former

> 8 This is also borne out in mean comparison tests, with t-statistics indicating that statistically significant difference in the average delay (or number of years to production) from discovery to production across gold and copper mines. Mean comparison tests, however, show no statistically significant difference across mines of different sizes.

9