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Spectral analysis technique has been utilized to identify the Bauxite mineral occurrences in Panchpatmali, Orissa, India. Spectral processing of Landsat ETM+ data has been carried out by converting the digital data from quantized and calibrated values to reflectance values. Minimum noise fraction transformation is used to determine the inherent dimensionality of reflected Landsat ETM+ data, to segregate noise in the data, and to reduce the computational requirements for subsequent processing and interactively to locate pure pixels within the data-set, projecting n-dimensional scatterplots. Spectral processing results are displayed in the form of images corresponding to each group of pixels (endmembers). Mixed tune matched filtering method has been applied on Landsat ETM+ images which gave three score (abundance) images for three different classes (endmembers) such as Bauxite, vegetation and soil. Further, mineralized zones are identified using image fusion of ERS-2 SAR and Landsat ETM+ data using intensity-hue-saturation technique.