Stock market response to potash mine disasters

We examine the stock market reaction to disasters in potash mines. We use a sample of 55 mining accidents - natural and man-made - worldwide over the period 1986-2019. On average, the affected mining firms experience a cumulative drop in their market value of 1.15% in the first 2 day day of a disaster. We show also that the accidents impact stocks of the current and future (greenfield) competitors of the affected firms. The direction and size of the effect is determined by the relative strength of the negative risk effect and positive price and supply effects.