Person: McMahon, Gary
Oil, Gas and Mining Unit, World Bank
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Mining issues from community level to macroeconomic impacts; political economy; environmental economics
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Oil, Gas and Mining Unit, World Bank
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Last updated: January 31, 2023
Biography
Gary McMahon is a senior mining specialist at the World Bank. He has worked on issues in the mining sector for over twenty years, particularly in the areas of local benefits, social and environmental impacts, and macroeconomic opportunities and risks. His most recent publication examines the socio-economic and human development impacts of mining since the turn of the century in mineral rich low and lower-middle income countries. Previously, he examined the history of mining sector technical assistance by the World Bank, ‘World Bank Support for Mining Sector Reform: An Evolutionary Approach’. With a PhD in Economics from the University of Western Ontario, he has written extensively on development issues on a wide variety of subjects and has edited 9 volumes, ranging from the impacts of large mining operations on community development to the political economy of market reform in developing countries. He currently works on mining issues in Zimbabwe, Guinea-Bissau, Bolivia, Armenia, Romania, the Kyrgyz Republic, Tajikistan, and Kazakhstan.
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Publication The Power of the Mine : A Transformative Opportunity for Sub-Saharan Africa(Washington, DC: World Bank, 2015-02-05) Robinson, Peter; Banerjee, Sudeshna Ghosh; Romo, Zayra; McMahon, Gary; Toledano, Perrine; Pérez Arroyo, InésAfrica needs power - to grow its economies and enhance the welfare of its people. Power for all is still a long distance away - two thirds of the population remains without electricity and enterprises rank electricity as a top constraint to doing business. This sub-optimal situation coexists while vast energy resources remain untapped. One solution to harness these resources could be to tap into the concept of anchor load. Mining industry lends itself to the concept of anchor load as it needs power in large quantity and reliable quality to run its processes. Underpinned by a comprehensive database of mining projects between 2000 and 2020, this report explores the potential and challenges of using mining demand for power as anchor load for national power system development and expansion of electrification. This report finds that mining demand can indeed be a game-changer - an opportunity where policymakers and international community can make a difference in tapping the enormous mineral wealth of Africa for the benefit of so many people. The utilities would benefit from having mining companies as creditworthy consumers that facilitate generation and transmission investments producing economies of scale needed for large infrastructure projects, benefiting all consumers in the system. The mines would benefit from grid supply - typically priced much lower than self-supply - which allows them to focus on their core business, greatly enhancing their competitiveness. The country would benefit from more exports and tax revenues from mines, more job opportunities in local firms selling goods and services to the mines, and a higher GDP. The report estimates that mining demand for power can triple since 2000 going upto 23 GW in 2030. While South Africa will continue to be the dominant presence in mining landscape, its importance will reduce and other countries, primarily in Southern African region, will emerge as important contributers of mining demand for power. Simulations in countries with minimal power-mining interface suggests that bringing this demand explicitly into the power planning process can ensure more investments in both grid and off-grid power systems and potentially superior service delivery outcomes for mines as well as communities. These opportunities can also be attractive investment destinations for private sector. However, there are also risks and institutional roadblocks in power-mining integration - addressing many of them and employing risk mitigation mechanism are within the control of policymakers.Publication The Contribution of the Mining Sector to Socioeconomic and Human Development(World Bank, Washington, DC, 2014-04) Moreira, Susana; McMahon, GaryMany low and middle-income mineral-rich countries have experienced strong growth for a decade or longer, propelled by a rapid expansion of their mineral exports and a rise in prices of these commodities. This sustained strong economic performance goes against the accepted wisdom that even though the mining sector, like other extractive industries, can generate foreign exchange and fiscal revenues, it contributes little to sustained economic growth and, by extension, human development. Through the presentation of trends and patterns of various indicators, this paper shows that in addition to economic growth, countries rich in minerals other than oil have experienced significant improvements in their human development index (HDI) scores that are on average better than those experienced by countries without minerals. In a sample of five low and middle-income countries with relatively long histories of mining, benefits came from foreign direct investment (FDI), export revenues, and fiscal revenues. The overall impact of the mining sector was much stronger if there were infrastructure benefits and strong linkages to other industries, especially through domestic procurement. Contrary to the notion that there are no jobs in mining, in this small sample, employment related to the mining sector was very high in countries where linkages were strong, even before the multiplier and fiscal expenditure impacts were accounted for. Cooperation between the public and private sectors seemed essential to increasing such linkages. In addition, mining firms often made substantial contributions to local and regional development, at times due to legal requirements but often not. All five countries have either relatively high HDIs (compared with neighboring countries) or strongly improving HDIs.Publication The World Bank's Evolutionary Approach to Mining Sector Reform(World Bank, Washington, DC, 2010-10) McMahon, GaryIn this report, in addition to aggregate results, six brief case studies are used to highlight the impact of Bank supported mining sector reform on various indicators at different links of the value chain. These include: the impacts on investment; production and employment in Argentina; institutional capacity building in Papua New Guinea; production and fiscal revenues in Tanzania; community and regional development in Madagascar; mining sector reform and sustainable development in Mongolia; and mining and resource corridors in Liberia. The reforms of the 1990s and early 2000s, which focused on increasing investment and building regulatory capacity, have often had spectacular results with respect to investment and good results with respect to institution building. The work on increasing the efficiency and transparency of fiscal regimes has also achieved significant success, although it is still too early to make a final assessment. While the mining sector-specific aspects of the management and allocation of fiscal revenues are still in early days, there do seem to have been important impacts on poverty reduction and sustainable development in a number of countries that have undergone mining reform, although there has been an insufficient passage of time to make definitive judgments.Publication The Aluminum Industry in West and Central Africa : Lessons Learned and Prospects for the Future(World Bank, Washington, DC, 2009-12) Husband, Charles; McMahon, Gary; Veen, Peter van derThe purpose of this working paper is to evaluate the future of the aluminum industry in West and Central Africa, with a focus on aluminum smelting and its relationship with power generation and availability in the regions. The organization of this study is as follows. It continues with an overview of the global aluminum industry, including a description of the production process, current and projected supply and demand, and the most important cost considerations for companies investing in the industry. Chapter two provides a brief history and future prospects for the aluminum sector in West and Central Africa. Chapter three contains an analysis of the viability of the two most important existing smelters in the regions, Valco in Ghana and Alucam in Cameroon, as well as a briefer analysis of Alscon in Nigeria and the potential for other smelters in the regions. In chapter four, the recent experience of the three large aluminum smelters in southeast Africa is reviewed and lessons are extracted for West and Central Africa. Conclusions and recommendations are in chapter five.Publication Large Mines and the Community : Socioeconomic and Environmental Effects in Latin America, Canada and Spain(Washington, DC: World Bank and the International Development Research Centre, 2001) Remy, Felix; McMahon, Gary; McMahon, Gary; Remy, FelixThe book examines the impacts of medium- and large-scale mines on local communities, through six case studies, analyzing both the socioeconomic and cultural effects, as well as environmental impacts of mining operations on the communities. From a multidimensional perspective, studies investigate mining operations costs, and benefits, with an emphasis on the sustainability of benefits, and the outcomes of the legal, and consultative processes, in an aim to identify best practices - from the stakeholders' perspectives - in the management of mining development, extraction, and closure phases. It is relevant to note the two factors that affected increased globalization of trade markets in recent years: the decline of the communist trading block, and the increased environmental control in developed countries, being mineral activities in developing, and transition countries one of the most notable. Recommendations suggest that mining sustainability can only be maintained with public, and community support for the social, and economic activities of a region, based on valuable comprehensive environmental reviews of mine projects, and articulated with local populations through employment, and services provision. To this end, training strategies for the formation of "semi-technicians" or, a broader technical formation, should prepare a skilled work force, able to make contributions, and as well, be less dependent on one specific economic sector. But, concerted efforts on participatory local development should focus not only on capacity building, but on strengthening local community leadership beyond the lifecycle of a mine.