The global copper market has endured a turbulent year, as a series of accidents and shutdowns disrupted supply chains around the world. On September 8, approximately 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 marked the latest in a string of disruptions that have hit copper production throughout 2025.
Reports indicate that the flooding reached the level under development, killing two workers. Following the accident, Freeport-McMoRan Inc. declared force majeure, citing its inability to meet contractual obligations due to a natural disaster or circumstances beyond its control.
Grasberg is the world’s second-largest copper mine, contributing over 3% of global supply. The shutdown is expected to negatively impact copper and gold sales in Q4 this year and constrain supply through 2026.
Previous projections estimated output of around 1.7 billion pounds of copper and 1.6 million ounces of gold, but the company has now cut its 2026 production outlook by 35%. Operations are not expected to return to normal levels until 2027, with gradual restarts planned next year.
Copper supply disruptions in 2025
The Grasberg incident adds to a series of setbacks that have hit the copper industry this year, including:
• A tunnel collapse at Codelco’s El Teniente mine in Chile.
• Flooding at Ivanhoe’s Kakula mine in the Democratic Republic of Congo.
• Operational issues at Teck Resources and Anglo American.
Between July 31 and August 1, an earthquake-triggered tunnel collapse killed six workers and halted all underground operations at El Teniente.
Codelco, Chile’s state-owned mining company, suspended all extraction activities and placed its Caletones smelter on maintenance after running out of feedstock.
El Teniente is one of the world’s largest copper producers, with annual output of roughly 400,000 metric tons, making it a cornerstone of the global market.
Grasberg impact likely to extend through 2027
Even before the Grasberg accident, analysts estimated that roughly 497,000 tons of copper production had been lost to mining disruptions by the end of August.
With the addition of Grasberg’s lost output, the global supply outlook for copper has turned considerably darker.
According to Reuters, citing Benchmark Mineral Intelligence, roughly 600,000 tons of refined copper could be lost between September 8 and the end of 2026 due to this disruption alone.
The event represents a pivotal shift in global copper supply dynamics and comes at a critical time, as demand for the metal surges thanks to its key role in electronics, renewable energy infrastructure, and data centers.
With repeated disruptions among major producers, the crisis highlights the fragility of mining infrastructure and the urgent need for investment in safety, automation, and resilient supply chains.
Analysts believe the effects of these disruptions will persist not only through 2026 but also into 2027.
Price and trade effects following the Grasberg shutdown
The world’s top 20 copper mines are expected to supply around 36% of global production in 2025, yet most face challenges ranging from geological constraints to operational and social pressures.
Benchmark Mineral Intelligence (BMI) sharply raised its forecast for the 2026 copper supply deficit from just 72,000 tons to about 400,000 tons. Citi offered a similar outlook, warning of an additional 350,000-ton shortfall in 2027 unless copper prices rise enough to spur new investment.
Goldman Sachs also revised its forecasts for copper prices and production for 2025–2026, estimating output losses of about 260,000 tons in 2025 and 270,000 in 2026 at Grasberg.
In total, Goldman expects around 525,000 tons of lost copper supply, prompting the bank to cut its global production forecast by 160,000 tons for H2 2025 and 200,000 tons for 2026.
Following the September 8 accident, copper futures jumped to $10,485 per ton — the highest level in 15 months.
Prices had seen a similar spike after the El Teniente shutdown, climbing 12% to $9,707.50 per ton.
