Shale gas is a game-changer, says Scots miner Life & times

Buchan also challenged the market consensus on the continuing decline of the gold price, and urged a new approach to the "800lb gorilla" of China as it pursued its global buying spree, which includes North Sea oil and gas explorers.

In a career that started in the 1970s, Buchan, 65, who is chief executive of Allied Nevada Gold Corporation, has held a string of directorships in mining companies in Canada, the United States, Central Asia and Africa. He is also a passionate promoter of mining engineering education.

Referring to the debate over the UK's exploitation of what are believed to be major shale gas reserves, recoverable through the controversial practice of "fracking", he said: "Why would you not want to find something that is fundamentally clean energy in relatively large quantities?"

He added: "Shale gas has already had a dramatic effect in the US; it is a game-changer, an amazing solution to what was a stressful problem [of high energy prices]. It's killed the coal business which is in throes of what I guess would be a two- or three-year decline – maybe not even that much."

"There are still questions about the effect on water tables, and I say this without a true recognition of the environmental issues, but I can't believe it is beyond our ingenuity to address them."

A report by PWC earlier this year estimated that exploitation of shale gas could boost the UK economy by up to £50 billion over the next three decades, with perhaps £5bn of that accruing to Scotland, though early ventures such as the Australian Dart Energy's attempts to explore in Falkirk and Dumfries and Galloway have prompted strong opposition from environmentalists.

Buchan also challenged a strongly prevailing market view expounded by the influential US economist Nouriel Roubini earlier this month that the "gold boom" – the long rally which peaked at $1921.15 per ounce in 2011 – was over. Buchan said that he "seriously doubted that the price would decline much more" than its current price of $1379 an ounce, "and I seriously doubt it won't go up".

He added: "The prognosis has to be for higher prices simply because the value of the dollar against hard assets is going down, anything of hard value is going to increase. There has also been a dramatic change in the cost of producing gold.

"All the high-grade deposit has been mined out, and we have been forced into lower-grade deposits and the net result is the cost of producing gold has been going up sharply up. If you start shutting mines down it will have a big effect, so I don't see a big downside from here.

"I'd doubt we are going to see gold prices go down much below $1100 as a targeted low."

Roubini, by contrast, predicts gold prices moving "much lower, towards $1000 by 2015".

Buchan added: "The starting point for me is that the price of gold doesn't change, it's how many pieces of paper you have to spend to get it that changes. If you take this simplistic view, you have to ask if the value of the US dollar is going up or down and I believe it's going down.

"We have a world in which constructive devaluation is going on, everyone is taking part in a rush to the bottom, who's going to have the lowest value currency, and I don't see that changing, so in the short-term gold is as volatile as I've ever seen it."

Buchan also urged Western economies to reconciliation with the growing power of China, which he described as "an 800lb gorilla in the process of becoming a 1000lb gorilla", ascribing its global buying spree to fears about the future of the US dollar.

"China has a trillion dollars in its pocket and they are spending it as fast they can, as they know the value of the dollar is inflated because it's the only reserve currency. They are buying everything. They have been very capable business people for millennia and they have become more willing to spend money than they used to.

"They just want to get rid of dollars and they want hard assets, so they are buying by the billions of dollars every week, buying out assets in Canada and everywhere else.

"We have to treat the Chinese with more respect and recognise that their culture is different from ours, as we can't base our future in wanting to sell stuff to China and at the same time telling them that they have to change the way they do business."

At the installation ceremony last week, Professor Steve Chapman, principal and vice-chancellor of Heriot-Watt University, said: "Dr Buchan - will bring to the position of Chancellor his extensive entrepreneurial experience and his passion for higher education and advancing scientific research. He will be an inspiration to our students."

THE son of a fisherman from Peterhead, Bob Buchan studied mining at Heriot-Watt University because "it looked easy, and I'm fundamentally lazy". The option to move to Canada on an exchange programme with Queen's University, Ontario was a similarly casual decision – which he immediately regretted: "If I could have found a way to come home and save face I would have done it."

He decided to stay, however, and in the career that followed, founded some of the world's most successful mining businesses including Kinross Gold (market capitalisation US$6.9bn), Katanga Copper ($1.2bn) and Allied Nevada ($695m).

In 2011, he was made chairman of Polyus Gold International, the Russian mining and metallurgy company primarily concerned with gold production, but stood down earlier this year to resume the CEO role at Allied Nevada after sacking his appointee for "failing to achieve his own targets".

Buchan, a director of the philanthropic Buchan Family Foundation, gave $10m to his alma mater, Queen's University, the largest single donation to mining education in Canadian history. In 2010, he gave £1.3m to Heriot-Watt to establish a new chair in sustainable energy engineering. He has also given £650,000 to endow the Whitlock Energy Collaboration Centre at Carnegie College in Dunfermline.