Copper shipments from Indonesia are suffering delays after the smelter that processes ore from the giant Grasberg mine was halted because of a boiler leak over the weekend.
Buyers of copper from Gresik, a plant that processes ore from the mine jointly owned by the Indonesian government and Freeport-McMoRan Inc., were informed the smelter will be closed for assessment and repair over the coming weeks, people with knowledge of the situation said, asking not to be named as they’re not authorized to discuss the matter publicly.
Gresik’s operator PT Smelting is jointly owned by Mitsubishi Materials Corp. and PT Freeport Indonesia, an entity owned by Freeport and the Indonesian government.
Freeport’s preliminary assessment showed that repairs can be completed by the end of September, and the company is aiming to restart its own Manyar smelter earlier than expected, a spokesperson said by email. Freeport is adjusting its shipping schedule to restart Manyar in late August, they said.
Mitsubishi Materials earlier had confirmed that operations at the facility were currently suspended after a breakdown on Aug. 8, in response to Bloomberg queries.
The disruption comes as the copper market is tightening with a surge of flows to the US and a recent uptick in cargoes to China. Benchmark prices on the London Metal Exchange have traded above $14,000 a ton for an unprecedented five straight days, and a key spread is signaling a supply squeeze with the highest premium on near-term deliveries since October.
The giant Grasberg mine in Indonesian Papua has restarted partially after mudflow hampered production last year, in a protracted recovery that may drag on until 2028. Freeport’s own Manyar smelter in Indonesia is expected to restart in September to also process ores from the mine.
(By Julian Luk and Eddie Spence)
