Copper prices surged roughly 2% in intraday trading Wednesday after Freeport-McMoRan (NYSE:FCX) outlined the significant production shortfall caused by the suspension of its Grasberg Block Cave mine in Indonesia following a fatal mud rush.
The mining giant confirmed that operations remain halted after two workers were killed, while search efforts continue for five missing employees. Freeport warned that the shutdown will reduce third-quarter 2025 consolidated sales by about 4% for copper and 6% for gold compared to earlier July projections.
The fourth-quarter impact is expected to be even more pronounced. Copper and gold output at PT Freeport Indonesia is now projected to be “insignificant” relative to previous forecasts of 445 million pounds of copper and 345,000 ounces of gold.
Looking further ahead, the company expects 2026 production at PT Freeport Indonesia to come in roughly 35% below prior estimates of 1.7 billion pounds of copper and 1.6 million ounces of gold. Freeport does not anticipate a return to pre-incident production levels until potentially 2027 under its phased restart plan.
The company said that operations at its Big Gossan and Deep MLZ mines are expected to resume by mid-fourth quarter, while Grasberg’s phased restart and ramp-up is scheduled for the first half of 2026.
Freeport has declared force majeure on affected contracts and projects insurance recovery for the incident to be capped at $700 million after a $500 million deductible.
The disruption comes amid already tight global copper supplies, helping to push prices higher as the market reacts to the unexpected production shortfall at one of the world’s largest copper mines.
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