18 December 2013

New McKinsey Global Institute Report: Reverse the Curse: Maximizing the potential of resource-driven economies

On 5 December 2013, Herbert Smith Freehills hosted a breakfast panel session in its London offices to mark the publication of a new report by the McKinsey Global Institute (MGI), 'Reverse the Curse: Maximizing the potential of resource-driven economies'.

Dr Fraser Thompson, a Senior Fellow at MGI, gave an overview of the report. Fraser then joined the panel, chaired by Greg Mulley (Herbert Smith Freehills, London, Head of Mining), with Kate Carmichael of International Council on Mining & Metals, and Herbert Smith Freehills Mining Team partners Stéphane Brabant (co-head Global Head of Mining) and Jennifer Bell.

The latest report outlines the changing resource landscape and the opportunities and challenges for resource-driven governments and companies in the extractive industry.

All too often, governments have failed to make the most of potential resource wealth. In fact, many resource-driven economies have underperformed those without natural endowments, which is a huge lost opportunity for economic development and poverty alleviation when we consider that about 70% of the world’s poor live in resource-driven countries. If resource-driven countries, particularly those with low incomes, could use their resource sectors effectively as a platform for broader economic development, this could transform their prospects.

This changing resource landscape will also have significant implications for extractive companies, financing and investment. As exploration and production increasingly shift to developing countries and frontier markets, companies that can reframe their mission from simple extraction to ongoing partnership in economic development are likely to secure a real competitive advantage.

Please click here for the full MGI report.

Attendees at the seminar commented that they found the session to be very insightful, informative and overall felt the report identified significant issues that the resources industry is facing.

A key theme of the MGI report is effective communication and engagement with the government and local stakeholders at all stages of a project.  Our dedicated global mining team covers every aspect of the industry, including public and private M&A, joint ventures, IPO’s and secondary capital raisings, compliance, crisis management, dispute resolution and every stage of the project life cycle.

For further information, please contact Greg Mulley (Partner, London), Jennifer Bell (Partner, London), Stéphane Brabant (Partner, Paris), or your usual Herbert Smith Freehills contact.

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