Problems of ore loss and dilution, particularly ore loss, are critical in Chinese underground mines. In a few mines, ore losses are as high as 40% to 50%. At the Yushiwa underground iron mine, for instance, the loss rate in 1982 was 60. 35%. The reasons for this high rate of ore loss and dilution are many, but they relate mainly to inappropriate technology and poor management, both in terms of science and of common sense. This paper discusses the causes of mineral reserve losses and outlines a method for evaluating economic profit so as to reduce these losses.