The national provincial geological exploration fund has been an important part of China’s financial investment in mineral exploration for more than ten years since its operation.It has played an important role in implementing the new mechanism for mineral exploration, reducing the risk of mineral exploration, stimulating social investment, ensuring the safety of national mineral resources, playing a macro-control role, serving the local economic development and expanding the service field of geological work.On the basis of introducing the background and development of the provincial geological exploration fund, this paper expounds the important role played by the provincial geological exploration fund, including the effective implementation of the functional orientation of the new prospecting mechanism, the protection of the national mineral resources security, and the active play of the role of macro regulation of policies.The problems and challenges in the development of provincial geological exploration funds are analysed, such as the difficulty in achieving balance of income and expenditure and a virtuous circle in the short term, the lack of a stable source of funds, the lack of unified standards and methods, etc.In addition, suggestions and measures for the follow-up operation and development of provincial geological exploration funds, such as planning the top-level design of geological exploration funds as a whole, establishing a sustainable and stable source of funds, and improving the standards and methods for the operation and management of geological exploration funds as a whole, are also put forward.