Tibet is rich in mineral resources, but still its economy has remained underdeveloped. Surveys of the Kailas and Ma-fa-mu-ts'o districts in western Tibet conducted in the 1930s and '40s discovered extensive goldfields and large deposits of borax, as well as reserves of radium, iron, titanium, lead, and arsenic. Subsequent investigative teams dispatched in the 1950s by the Academia Sinica (Chinese Academy of Sciences) reported the existence of a huge variety of minerals and ores. The most significant of these include a belt of iron-ore deposits located on the western bank of the Mekong River stretching for almost 25 miles south of Ch'ang-tu; graphite obtained from Ning-chin and coal reported to be plentiful around Ch'ang-tu; deposits of iron ore in concentrated seams of high quality and extractable depth found in the T'ang-ku-la Mountains on the Tibet-Tsinghai border; and oil-bearing formations, a reserve of oil shales, and lead, zinc, and manganese.

The most valuable woodland is the Khams district, though extensive forest-clad mountains are also found in the Sutlej Valley in the southwest and in the Ch'u-mu-pi Valley in the far south. In the late 1950s some 30 kinds of trees, including those of economic value such as varnish trees, spruce, and fir, were discovered; and the estimated total of forest timber resources in the Khams area alone was placed at more than 3,510,000,000 cubic feet (100,000,000 cubic metres).

The swift-flowing rivers and mountain streams have enormous hydroelectric power potential, totaling about one-third of all China's potential hydroelectric resources. Especially promising are the Brahmaputra, Lhasa, and Ni-yang-ch'ü rivers. The coal deposits and forests represent possible sources of thermal power production, and there are vast opportunities for geothermal, solar, and Elian power production.