The financial value of contracts between firms and local communities, know as CBAs.
What is it about?
Community benefits agreements (CBAs) are contracts in which a community provides consent for a new investment in return for tangible benefits, such as local hiring and revenue sharing. We argue that although CBAs are costly for the firm, they are particularly valuable when communities can cause costly disruptions and delays for a firm. Our study of investor reactions to the announcement of 148 CBAs signed between mining companies and local indigenous communities in Canada shows that investors value more CBAs signed with communities with strong property rights and histories of protest.
Why is it important?
A mining firm and a local community can reach a shared understanding of how mining operations will develop through negotiating and signing a community benefits agreement (CBA). A junior mining firm can more than double its market value by signing a CBA.
The following have contributed to this page: Assistant Processor Sinziana Dorobantu
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