Innovation: Rich prospects by satellite snap: Mining groups are using images from space to seek out resources throughout the world

MINERAL deposits used to be found by chance or mistake - oil seeping from the ground, grains of gold in a stream, a misbehaving compass. In this century, exploration has been helped along by technology - test drilling, sophisticated sample analysis and aerial photographs. Today, mining companies are increasingly turning to satellite - the ultimate spy-in-the-sky that lets them examine the most remote corners of the Earth from the comfort of a laboratory.

At the same time, political changes have made exploration more worthwhile. As recently as five years ago, there were still dozens of countries in Africa, Asia, South America and Eastern Europe where a mining company would not have been welcome. But with the sweeping shift towards liberalisation, most governments are now happy to encourage foreigners who will help them exploit their wealth of resources. As a result, the big mining groups are pouring funds into exploration - hoping to find the kind of large reserves that will generate profits even when prices are low.

RTZ, the world's biggest mining group, has expanded exploration rapidly since it bought BP Minerals in 1989. Its US and Australian operations have their own dedicated departments, its South American exploration is covered from Santiago, Chile, and it monitors the rest of the world from a small office in the centre of Newbury, Berkshire.

Here, Alastair Lamb, the geologist in charge of satellite exploration, and a colleague pore over images - either on paper or a computer screen. Some show known mining areas where bodies of ore may still lie undiscovered. Others are used for 'grassroots exploration' - of areas where no minerals have been found but where the geology looks promising.

Mr Lamb pulls out a print, about three feet square, showing 185 square kilometres of mountainous country in Central America. Taken from an altitude of 720km, it was produced from 270 megabytes of computer data generated by an 'imaging device' on the US Landsat satellite. It cost dollars 4,400 (pounds 3,060).

He points to a semicircle marking out a caldera, the top of an extinct volcano, and explains that ores are most likely to give themselves away in fractured volcanic structures.

Physical analysis can help geologists, but the real strength of the satellite shows up when the data is used to enhance 'spectral bands' that highlight particular types of material on the Earth's surface. Another version of the same image exaggerates areas rich in iron oxide and clay. A yellowing indicates that both exist.

Certain minerals will attack the surrounding rock, causing a staining or 'haloing' effect that can be seen from space. When an interesting formation shows up, someone will be sent in by car or helicopter to take samples. 'Often he will find scratchings in the hillside from the last century,' Mr Lamb said.

If the area is promising, the company will stake a claim and start the process that may eventually lead to a mine.

Satellite pictures have been available for 21 years, since the first Landsat was launched. Initially, however, resolution was not good enough for minerals. Landsat 4 went up in 1982 with a 'thematic mapper' instrument that could break down the information by spectral band, and it was much more effective. Landsat 5, launched in 1985, is to be replaced later this year. The French have a satellite called SPOT, which has better spatial, but not spectral, resolution than Landsat.

The satellites take two hours to circle the Earth over the poles, and the whole surface is covered in 16 days. That does not mean the whole world can be examined, however, because coverage depends on ground stations that can pick up and retransmit the signals; the gaps are being filled, but there are still areas on which there is no data.

Satellites have limitations. For instance, they cannot normally see through clouds or trees, which is why the minerals of much of the world (including Eastern Europe) remain out of sight. Their cameras also get confused by vegetation.

Remote sensing is at its most effective in arid areas with young volcanic rocks, such as the south-western US, where the technology was developed. The Andes are also suitable, and mining companies are particularly active in Chile, where the political climate is favourable to them.

Remote sensing has also paid off in Burundi, Central Africa, where Landsat pictures showed that the geological structure was quite different from what had previously been assumed. SPOT data has also been used to find gold in the Altai Mountains of China.

Although satellite data will undoubtedly improve, Mr Lamb said mining companies could not afford to wait. There was, he claimed, a window of opportunity for finding many world-class deposits during this decade.

(Photographs omitted)