Even today, mineral property rights are allocated on what is essentially a first-come, first-serve or open access basis. Access to prospect and locate claims may be restricted in some areas such as national parks, but elsewhere a policy of open access is widely practised, albeit subject to a set of more or less well-specified environmental regulations. When a discovery is made the available regulations are usually able to deal with it on its own. What they are less able to do, particularly at a time when an increasing number of environmental variables is included in project assessments, is to handle the other projects that are generated by the "gold rush" informational externalities created by the initial discovery. At the core of the problems of dealing with a gold rush situation is both the informational externality and an institutional framework which is not designed to deal with large influxes of prospectors competing for a very limited area. This paper charts significant gold rush events in the mineral industry in recent decades and uses preliminary data on the areas impacted by these gold rushes to argue that many mineral tenure systems should be modified in order to be better able to deal with the consequences of rushes.
Mineral Economics and Management Society Annual Meeting. Proceedings of the Mineral Economics and Management Society Annual Meeting / Mineral Economics and Management Society, Houghton, Michigan, 1998.