Freeport declares force majeure at Grasberg, expects lower copper, gold sales
Freeport-McMoRan on Wednesday declared force majeure at its Grasberg mine in Indonesia and said it is expecting consolidated sales to be lower for copper and gold in the third quarter, sending its shares down 10.4%.
Earlier this month, the company had temporarily halted mining at Grasberg after a large flow of wet material blocked access to parts of its underground mine, restricting evacuation routes for seven workers.
Freeport last week located two team members who had been fatally injured in the incident.
The company said a phased restart and ramp-up of operations at Grasberg, one of the world's largest gold and copper mines, may occur in the first half of 2026.
It also indicated that 2026 production at its Indonesian unit could potentially be about 35% lower than previous estimates.
The company had been building a smelter in Indonesia that was damaged by a fire last year and was shut down.
Copper prices on the London Metal Exchange jumped by more than 3% to their highest in more than 15 months on Wednesday, following the announcement by Freeport.
"We are not surprised by a downward revision to guidance, but this cut is more significant than we had anticipated," said Jefferies analysts.
The analysts also said that this disruption should lead to a tighter copper market, which will be positive for the company's operations in the Americas.
Freeport now expects third-quarter copper and gold consolidated sales to be lower by about 4% and 6%, respectively, compared with its prior forecast of 1 billion pounds of copper and 350 thousand ounces of gold.
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