The classic definition of resource rent is the excess of the total project lifetime value
arising from the exploitation of a deposit over the sum of all costs of exploitation
including the compensation to all factors of production.7 The latter includes the minimum
return on capital required by the investor. Resource rent is depicted in Diagram 2. A
compensatory return on capital would consist of a basic return equivalent to the rate of
interest on risk-free long term borrowing plus a margin the investor considers necessary
to compensate for the technical, commercial and political risks associated with a
particular investment