Copper prices jumped Wednesday after Freeport-McMoRan (NYSE: FCX) declared force majeure on contracted supplies from its Grasberg Block Cave mine in Indonesia.
Three-month futures traded above $10,496 per ton ($4.7710 per lb.) on the CME, up 2.74% for the day. In London, copper for delivery in three months rose as much as 2% to $10,172 a ton on the London Metal Exchange, the highest level in more than 15 months.
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Freeport’s shares fell as much as 10.4% in New York, while rivals Glencore PLC (+3%), Teck Resources (+5%), and Antofagasta (+7.4%) climbed.
BMO Capital Markets said the announcement was largely in line with expectations for a weaker second half of 2025, but noted that the preliminary 35% cut to the 2026 production outlook is an incremental negative, with Grasberg output not expected to return to pre-incident levels until 2027.
Analysts described it as a “negative near-term development that will likely put Freeport in the penalty box.” However, BMO also highlighted that 60% of Freeport’s copper production comes from North and South America, meaning the company still has strong regional output. At the same time, a potential increase in copper prices stemming from reduced supply could partly offset the impact.
Fatal accident
Two workers died after the Sept. 8 accident at Grasberg. According to Freeport, a sudden rush of approximately 800,000 metric tons of wet material entered the mine and traveled rapidly across multiple levels, including the service level where the missing team members had been conducting development activities. The company is continuing the search for five other workers.
Production at Grasberg—the world’s second-largest copper mine—has been halted following the accident.
The Grasberg Block Cave ore body represents 50% of PT Freeport Indonesia’s estimated proven and probable reserves as of December 31, 2024, and approximately 70% of the company’s previously forecast copper and gold production through 2029.
The incident occurred in “PB1C,” one of five production blocks in the Grasberg Block Cave, but caused damage to infrastructure required to support other production areas in the district.
Freeport also issued updated third-quarter guidance on Wednesday. Consolidated sales are now expected to be about 4% lower for copper and approximately 6% lower for gold compared to its July estimates.
In a separate disruption to the copper industry, Hudbay Minerals (TSE: HBM) said late Tuesday it was shutting operations at a mill at its Constancia mine site in Peru due to ongoing political protests.