Indonesia’s government has reached an agreement with Freeport-McMoRan (NYSE: FCX) to halt operations at the Grasberg mine and prioritize the search for missing workers following a landslide incident, Reuters reported.
Earlier this month, a large mudflow left seven workers trapped at the Grasberg Block Cave underground mine. Two of the workers have since been found dead, but the rest remain missing.
The mine, the second-largest copper producer globally, is operated by Freeport Indonesia, a joint venture between the Indonesian government and Freeport.
On Wednesday, the US-based miner declared force majeure at the underground mine, which holds half of Freeport Indonesia’s reserves and is expected to supply about 70% of its copper and gold output through 2029.
Speaking to reporters, Indonesia’s mining minister Bahlil Lahadalia confirmed that the mine has not resumed since the incident, with the suspension impacting both output and revenue. Asked when operations would restart, he said the Indonesian government and Freeport would discuss the matter.
He added that the parties have also held talks on extending Freeport’s mining permit beyond 2041.
Freeport did not immediately respond to a request by Reuters for comment.
Market disruptions
Freeport, meanwhile, also issued this week an updated third-quarter guidance, lowering consolidated sales expectations by about 4% for copper and 6% for gold compared to its July forecast.
The announcement pushed copper prices to their highest level in more than 15 months on concerns over tighter supply.
BMO Capital Markets said the announcement was broadly in line with expectations for a weaker second half of 2025 but noted that the preliminary 35% cut to 2026 production guidance is an incremental negative, with Grasberg output not expected to return to pre-incident levels until 2027.
BMO analysts described Freeport’s suspension as a “negative near-term development that will likely put Freeport in the penalty box.”
Adding to the disruption to the copper industry, Hudbay Minerals (TSX: HBM) said late Tuesday it was shutting operations at a mill at its Constancia mine site in Peru due to ongoing political protests.
“The copper market has been, and continues to be, jolted by supply-side issues this year,” said Olga Savina, a commodities analyst at BMI, a Fitch Solutions company. “We expect any prolonged supply setbacks to further strengthen the bullish narrative for copper throughout the remainder of this year and possibly into 2026.”
On Friday morning, three-month copper futures were trading down 0.75% at $10,496 per tonne ($4.7225 per lb.) on the CME. (With files from Bloomberg)
