Prospecting Industries

I went digging in the source code (gotta love open source games...)

First, you have to pass a random check for success (I haven't been able thus far to trace back what the "default" value for this is...), and then the game will attempt to place the new industry in a random location. If this fails, it tries to orient the industry differently, until it runs out of potential orientations. It then picks another location and tries again, up to 5,000 times.

Height doesn't appear to be a factor, but proximity to another industry of the same type does, and I believe that it's checking to make sure it can "land" the industry on flat ground.

The lesson here is twofold - one, there's a chance to fail, period. You might just be unlucky. Secondly, there's a chance that it will attempt to place a new industry and fail, due to bad luck or overcrowding when picking the tiles to place the industry on.