Freeport-McMoRan has announced a significant delay in the full restart of its massive Grasberg copper mine in Indonesia, pushing the new target to early 2028.
This news is critical because it tightens an already squeezed global copper supply. Copper is a vital metal for the future, powering everything from electric vehicles to AI data centers. As demand surges, prices have been climbing. This delay removes a huge potential source of supply from the market for much longer than anyone anticipated, amplifying concerns about a prolonged shortage.
To understand the full picture, we need to look at the chain of events. First, the problems at Grasberg are not new. The root cause traces back to a major mudslide in September 2025, which damaged the mine and forced the company to declare force majeure, a clause that frees them from contractual obligations due to unforeseen circumstances. Since then, the recovery has been plagued by technical challenges like dealing with "wetter ore," making the ramp-up much slower than planned.
Second, the issue isn't just at the mine; it extends to the processing stage. China, a dominant player in the copper market, recently halted exports of sulphuric acid, a chemical crucial for processing copper ore. On top of that, major smelters—the industrial facilities that refine raw ore into pure metal—in both China and Zambia are reducing output or planning shutdowns. This creates a severe bottleneck, meaning even if ore is mined, it can't be turned into usable copper efficiently.
The market has reacted nervously to this drumbeat of bad news. Freeport's stock (FCX) fell sharply when an initial delay was hinted at in April. This formal extension to 2028 solidifies the supply shortage narrative. It also challenges recent forecasts from groups like the International Copper Study Group, which had projected a small market surplus in 2026. With Grasberg's full potential delayed, the consensus is shifting back toward a deficit, making the market highly sensitive to any further disruptions.
- Force majeure: A common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond their control occurs.
- Smelter: An industrial facility for extracting a base metal from its ore through heating and melting (smelting). It purifies the raw material into a usable form.