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Freeport said in a release Wednesday that it expects
consolidated sales of copper to be 4% lower than its July
estimates. Gold sales are expected to be 6% lower than previous
estimates.
Shares of Freeport fell more than 13% at midday, to $39.31 each.
Copper futures rose 3.8% to $4.82 a pound at midday, with
analysts at Jeffries saying they expect prices to climb above $5
per pound “imminently."
On Sept. 8 about 800,000 metric tons of “wet material” entered
the Grasberg Block Cave mine, moving rapidly to different levels
and killing two workers, whose bodies were located on Saturday.
Five others remain missing and search efforts are ongoing, the
company said.
Freeport said the Big Gossan and Deep MLZ mines, which were
unaffected by the flood, could restart operations by the middle
of the fourth quarter of this year, with a phased restart of the
Grasberg Block Cave mine beginning in the first half of 2026.
The Jeffries analysts noted that while the disruption was a
“clear negative for the company and its equity value,” a
guidance cut had been expected and some of it already reflected
in Freeport’s share price. They added that the production
stoppage in Indonesia should lead to higher prices for copper,
which would benefit Freeport’s operations in the Americas.
Copper prices had risen to record highs this year, nudging
toward $6 per pound in late July before the Trump administration
surprisingly exempted refined copper from a 50% tariff. Copper
futures quickly tumbled from $5.59 to $4.35 per pound on the
announcement.
Copper is critical to global energy infrastructure, used in
cords for electronic devices, transmission lines, batteries, and
LED lights. A global shift to cleaner energy technology, such as
solar power, had already boosted demand, which is expected to
keep growing as the development of artificial intelligence
technology puts more of a strain on data centers and the energy
grid.
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