In the ore exploration by CSAMT in mountainous areas, terrain and local electrical static effects cannot be surely corrected by simply using various filtering and phase integral methods. It is important to develop a new method to eliminate static effect, so as to improve the CSAMT data processing and interpretation. By taking eliminating terrain effect as a main consideration and with the 2D earth and 3D source models in an undulated terrain environment concerned, a weighted cosine numerical integral method has been adopted to perform 2D finite‐element forward modeling in the wave‐number domain. A cross‐symmetrical triangular grid was used to simulate a complex geo‐electrical earth with terrain involved for forward calculation of 2D CSAMT data acquired with the equatorial dipole array, which is popular in China. On the basis of the 2D forward modeling, a 2D inversion technique has been developed based on the OCCAM method. And a set of 2D forward and inversion techniques suitable to deal with undulated terrains have also been developed. It has been proved by theoretical modeling and measured data processing that the terrain and static effects can be effectively corrected by the techniques. In mineral explorations, terrain and static effects can thus be mostly eliminated in so inversed resistivity sections, with geo‐electrical features and ore anomalies clearly shown up.