LME copper surged 3.6% yesterday to settle above $10,336/t (the highest since May 2024), after Freeport-McMoRan declared force majeure, meaning it would be unable to fulfil contracts to customers from its giant copper mine in Indonesia due to forces beyond its control.
Operations at Freeport’s Grasberg mine, which is the world’s second-largest copper mine, were halted nearly three weeks ago after a fatal mudslide in which at least two people died.
The mine accounted for around 3% of global copper supply this year (prior to the disruptions), nearly 30% of Freeport’s copper output and 70% of its gold production, underscoring the scale of the impact.
Freeport said it was not possible to forecast future copper and gold production from the mine and that the disaster was “likely to result in the deferral of significant production in the near-term”. It said a return to previous operational levels “could potentially be achieved” in 2027.
A prolonged disruption at the Grasberg mine could drive copper prices even higher, while intensifying supply challenges for smelters already facing feedstock shortages.
It adds to disruption in global copper supplies. Earlier this week, Hudbay Minerals announced a shutdown at its Constancia mill in Peru due to ongoing political protests.