Freeport declares force majeure at Grasberg

Shutdown at Grasberg marks the world's second-largest copper mine's exit from the international market and creates an uncertain outlook for Indonesia's domestic copper supply chain.

Freeport Indonesia has declared force majeure on operations at Grasberg, the world's second-largest copper mine, following a major incident on 8 September. The mine, previously guided to produce 850kt in 2026, is not expected to return to pre-incident production rates until 2027.

Grasberg's concentrate exports have provided significant relief to an unprecedentedly tight market this year, but smelters must now seek alternative sources of supply. This represents the second supply interruption in 2025 after Freeport's export permit expired in January as part of Indonesia's broader strategy to adopt domestic processing. In late March, the company secured a six-month reprieve with an allocation of 1.27mt. Kpler flows reveal the effective utilisation of this quota, with substantial volumes directed to Shandong Humon’s copper gold smelters, as well as Daye and Tongling Nonferrous on the Yangtze River.

Copper concentrate exports from Grasberg by country of destination

Source: Kpler

While the end of concentrate exports was to be anticipated, the market had expected that overall volumes would reach global supply chains as refined copper through PT Smelting and Freeport's new Manyar smelter. Recent vessel movements between Grasberg and Surabaya indicate the steady utilisation of the former and the effective ramp-up of the latter. The current closure will prevent both exports and domestic processing. Freeport's estimated 35% reduction to 2026 production figures represents approximately 300kt, equivalent to more than 1% of global copper supply.

For now Grasberg’s cargos remain on the water. The African Condor, Papora Wisdom, and Ludogorets are transporting concentrates to Dahej, LS-Nikko Onsan, and Aurubis in Hamburg, respectively. The volume of stockpiles remains unclear, however no vessel has loaded since 14 September, and the cabotage fleet responsible for domestic movements are stationary at anchor outside Grasberg.

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