The global copper market has witnessed an exceptional year marked by crises. On September 8, around 800,000 tons of wet material flooded multiple levels of the Grasberg Block Cave mine in Papua, Indonesia, forcing a suspension of all underground operations. The incident added another major disruption to the wave of mining and supply challenges that have hit the copper industry in 2025.
According to reports, the mud reached the level where development teams were operating, killing two workers. Following the accident, Freeport-McMoRan Inc. declared force majeure, citing its inability to meet contractual obligations due to an unforeseen natural disaster.
Grasberg is the world’s second-largest copper mine, accounting for more than 3% of global supply. The disruption is expected to affect copper and gold sales in the fourth quarter of this year and constrain supply through 2026.
Previous forecasts had projected output at about 1.7 billion pounds of copper and 1.6 million ounces of gold, but next year’s copper production outlook has now been cut by 35%. Full recovery is not expected before 2027, with gradual restart operations anticipated next year.
Copper Supply Disruptions in 2025
The Grasberg shutdown adds to a long list of setbacks that have shaken the copper industry this year, including:
• A tunnel collapse at Codelco’s El Teniente mine in Chile.
• Flooding at Ivanhoe’s Kamoa-Kakula mine in the Democratic Republic of Congo.
• Operational challenges at Teck Resources and Anglo American.
Between July 31 and August 1, 2025, a seismic event caused a tunnel collapse at El Teniente, killing six workers and halting all underground operations. Codelco, Chile’s state-owned mining company, suspended extraction and placed its Caletones smelter under preventive maintenance after running out of feedstock.
El Teniente produces about 400,000 metric tons of copper annually, making it one of the world’s key suppliers.
Grasberg’s Impact Could Extend Through 2027
Even before the Grasberg accident, analysts estimated that roughly 497,000 tons of copper output had already been lost to operational disruptions by the end of August. With Grasberg offline, the global supply outlook has worsened significantly.
According to a Reuters report citing analysts from Benchmark Mineral Intelligence, roughly 600,000 tons of contained copper are expected to be lost between September 8 and the end of 2026 due to the Grasberg shutdown alone.
The collapse marks a critical inflection point for global supply dynamics, at a time when demand for copper continues to surge thanks to its essential role in electronics, renewable energy infrastructure, and data centers.
These events underscore the fragility of global mining infrastructure and highlight the urgent need for investment in safety systems, automation, and resilient supply chains. Analysts believe the effects of these disruptions will persist at least through 2027.
Price and Trade Effects Following Grasberg
The world’s 20 largest copper mines are expected to account for about 36% of total global output in 2025, yet most are facing growing geological, operational, and social challenges.
BMI has raised its 2026 copper supply deficit forecast from just 72,000 tons to 400,000 tons. Citi Bank issued a similar outlook, warning of an additional 350,000-ton shortfall in 2027 unless copper prices rise enough to spur new supply.
Goldman Sachs also lowered its global production estimates, projecting Grasberg’s output could fall by 260,000 tons in 2025 and 270,000 tons in 2026—a total loss of 525,000 tons. The bank cut its global production forecast by 160,000 tons for the second half of 2025 and by 200,000 tons for 2026.
Following the Grasberg accident on September 8, copper futures surged to $10,485 per ton, their highest level in 15 months. The market saw a similar 12% spike to $9,707.50 per ton after the El Teniente shutdown.
