Indonesian copper smelters at a standstill as Batu Hijau resumes concentrate exports

Two months after the mud rush that led Freeport to declare force majeure at Grasberg, Kpler’s flows signal refined copper squeeze in Indonesia and its South East Asian trading partners.

On 24 September Freeport declared force majeure at Grasberg, the world’s second largest copper mine. Earlier that day, two vessels that had been waiting to load copper concentrate for the company’s domestic smelting operations in Gresik fired an early signal by departing without cargo. The Nimaome Emran and Syabil Emran were delivered to Indonesian waters in January of this year for the express purpose of increasing Freeport’s domestic tonnage. They form part of a fleet of six Indonesian-flagged vessels dedicated to Grasberg, the operations of which cast a shadow over the likelihood of resumed shipments from the mine in the near term.

Having supported the ramp up at Freeport’s new Manyar smelter this year, four of these vessels now sit idle off the coast of Gresik. Their positions provide a strong indication that neither exports nor domestic shipments will be resumed in short order. Nor indeed, had domestic movements been the priority in the run up to the force majeure. Through August and September Kpler’s flows reveal that Freeport had prioritised exports to make full use of the six-month export permit it was granted in March. This, together with downtime at PT Smelting due to maintenance, meant that concentrate stocks in Gresik were already low.

Gresik's copper concentrate imports

Source: Kpler

In the absence of their own concentrate, one scenario would have seen Freeport’s smelting operations temporarily supported by supply from Batu Hijau, Indonesia’s second copper mine. Like Freeport, Batu Hijau’s owners PT Amman have ramped up new smelting capacity this year in line with the Indonesian government’s aim to move downstream in the supply chain. Kpler’s sulphuric acid flows track the operation by virtue of its byproducts, with 360kt shipped so far this year against a nameplate capacity of 830kt. With the smelter still yet to reach full utilisation, PT Amman have been facing a growing stockpile of copper concentrate, and have applied for a permit to export 480kt through to April 2026.

As of November 6, Kpler’s flows confirmed the first arrival of a vessel at Batu Hijau’s concentrate berth since December 2024. The vessel, Tao Mariner, is now underway with a cargo of 24kt, signaling for China’s Qingdao. It was followed in short order by V Taurus, which reached the loading berth on 10 November, and the Tao Treasure, which has an ETA of 16 November. For now, there is nothing to indicate these vessels will bridge the supply gap at Freeport’s Gresik smelters.

Indonesia's copper cathode exports, January - September 2025

Source: BPS

With new smelter additions at Manyar and Batu Hijau this year, Indonesia has the capacity to produce over 1mt of copper cathode. However, in the absence of concentrate deliveries to Gresik and the underutilization of Batu Hijau’s 220kt smelter, Indonesian supply will be short in the near term. This has implications for domestic consumption, but also for the country’s trading partners such as Malaysia, for which Indonesian cathodes account for around one third of all imports.

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