Freeport delays Grasberg full restart to early 2028

Freeport-McMoRan’s (NYSE: FCX) Indonesia unit has confirmed the delayed restart of full production at the Grasberg mine, as it continues to recover from a deadly accident last year that dented the global copper supply chain.

The giant complex in Central Papua province, which was hit by a severe mudflow in September, is expected to return to full capacity by early 2028 instead of end-2027, the company said in a statement on Thursday. It’s aiming for 65% capacity in this year’s second half and 80% by mid-2027, according to its most recent earnings statement.

The company now expects Grasberg’s copper production this year to be 700,000 lb., down from the 1-billion-lb. target it had forecast in its fourth-quarter earnings report. The holdup is due to more work on logistics and ore handling machinery at Grasberg’s Block Cave underground mine portion, a Freeport spokesperson told Reuters. 

“Operations are currently in the recovery phase following the GBC underground mine incident, with production currently at around 40% to 50%,” Freeport Indonesia CEO Tony Wenas said in the company release. 

Shares in Freeport-McMoRan gained 1.6% in New York on Friday afternoon to $61.59, valuing the company at $88.3 billion. They’ve traded in a 52-week range of $35.15 to $70.96. 

Stages

As part of the recovery process, Freeport has laid out plans for a staged restart, beginning with areas that were unaffected by the mudslide. The Deep Mill Level Zone and Big Gossan underground mines had already resumed last year, while parts of GBC returned to operations last month.

The incident killed seven workers, forcing Freeport to immediately shut down mining activity and declare force majeure on shipments.

The suspension added further strain on the global copper market, as Grasberg accounted for about 3% of the world’s copper supply at the time, producing about 1.7 million lb. of the metal annually. It is also a major producer of gold, with annual production of 1.4 million ounces.

Earlier this year, the Freeport-McMoRan unit reached an agreement with the Indonesian government for a life-of-resource extension of operating rights.