(governance indicator), the earliest available values are taken to indicate the quality of governance for discoveries that occurred prior to those dates. Control variables are the logarithm of the size of the discoveries, a dummy variable for copper deposits, and dummy variables for middle-income and low-income countries. In the absence of mine-specific information on the depth of the deposit over time (as the deposit is depleted), it is not possible to control for the ease of access to gold or copper directly. Country dummies proxy for unobserved characteristics like the landlocked nature of the country.<sup>11</sup> A “good” policy environment conducive for resource investment—as well as non-resource investment—has many dimensions. It includes sound macroeconomic policies that ensure sustainable fiscal positions (as measured by government debt in percent of GDP at the time of discovery) and contain domestic demand pressures (as proxied by inflation at the time of discovery). A more stable macroeconomic environment can be associated with more predictable tax and expenditure decisions. A conducive policy environment includes high quality of institutions, at the time of the discovery, that affect mining operations. This is proxied by the World Bank Governance Indicators for Control of Corruption and by the QOG Institute’s Index of the Quality of Government.<sup>12</sup> These are some of the same conditions that would help avoid the macroeconomic volatility and stunted growth in resource-based economies that has been labelled the “resource curse” (Sachs and Warner 2001; Mehlum, Moene and Torvik 2002; Humphreys, Sachs and Stiglitz 2007).

The regression in Column (1) in Table 1 shows that expected times to production are nearly twice as long for copper deposits, and similarly 30-40 percent higher in MIC and LIC countries. Column (2) shows that high levels of debt lengthen the lead time to production by 16 percent respectively. Higher inflation also lengthens the lead time (by about 8 percent) but the results are only marginally significant. On its own, the commodity price cycle measure is not statistically significant. However interacted with copper mine size, shows that copper mines tend to get developed faster when commodity prices are rising. These results are robust to the inclusion of additional variables in Columns (3) and (4). Finally, governance variables indicate that when governance improves (indicated by higher values of the corruption index), expected times to production fall by nearly 10 percent. The quality of government index is not statistically significant on its own, but when interacted with the variable indicating a copper deposit, shows that times to production of a copper mine fall by nearly 30 percent when governance improves.

The results suggest an important role for the commodity price cycle, sound macroeconomic management and the quality of governance. Higher commodity prices, on average, are not significant determinants of lead times, probably because of the significant sunk costs involved. However, for copper deposits, an upswing in copper prices at the time of discovery—the crucial

> 11 Regression results are robust to the use of decadal dummies which could help control for the decelerating time to production since the 1950s.

> 12 The importance of the policy environment is borne out in anecdotal evidence. For instance, the Oyu Tolgoi mine in Mongolia—despite being one of the largest copper deposits in the world—took nearly a decade to become operational in 2013, following initial exploration in the early 2000s, lengthy feasibility studies and negotiations between the government and Rio Tinto over the financing of the mine’s construction.

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