You can see how in Parker Selfridge's office:
James Cameron's original scriptment had this to say:
Here's how it works:
Polyphemis (the massive planet around
which Pandora revolves) has a mother of magnetosphere... a
naturally occurring magnetic field a million times more
powerful than Earth's.
- As Pandora rotates and revolves
through this field, its molten iron core generates its own
field, with "cells" or vortices which are small regions of
intensely powerful magnetic force at the surface.
Added to this unique phenomenon is another... Pandora is
blessed with a naturally occurring substance a million
times more precious than gold. Its joke name of
"unobtanium" has stuck, over the years.
Unobtanium is a
rare-earth mineral, formed volcanically, which is a roomtemperature superconductor.
- The room temperature superconductor has been the "snark"
of modern materials science... a substance which transmits
electricity with zero resistance, but at normal
temperatures, rather than the liquid-helium cooled
superconductors of human science.
Unobtanium does not exist in our solar system. It is
unique to Pandora. And it is the reason to go there...
the pot of gold at the end of the rainbow bridge.
Another interesting property of superconducting materials
is that they will levitate in a powerful magnetic field.
This magnetic levitation, or maglev, effect has been used
to lift trains and run them without wheels since the late
On Pandora the effect causes huge outcroppings of
unobtanium to rip loose from the surface and float in the
magnetic vortices. These floating islands circulate
slowly in the magnetic currents, like icebergs at sea,
scraping against each other and the towering mesa-like
mountains of the region.
Why not mine the Mountains?
The RDA originally was mining the mountains, but after one mountain was mined from the bottom too much, it became top heavy and flipped over, killing a huge number of workers and ruining much equipment. After this incident the RDA stuck to mining more safe locations of the substance.