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Shares in Australian copper producers are surging higher following a commodity price spike. Mining at a major mine in Indonesia remains on hold and won't be coming back any time soon.
New York Stock Exchange-listed Freeport-McMoran Inc (NYSE: FCX) announced overnight that mining at its Grasberg Block Cave Mine (GBC) in Indonesia remained on hold while the company continued to search for five employees who had been missing since a mudslide on September 8.
Two staff members have so far been confirmed killed in the incident.
Freeport shares tumbled almost 17% on the news overnight, while copper futures prices spiked more than 4%, according to Trading Economics. The price of copper traded at the London Metals Exchange was up 3.63%.
Freeport said the mining stoppage would lead to a 4% fall in its copper sales for the third quarter of 2025 and a 6% fall in its gold output.
The company said the impact would also not be resolved quickly.
Sufficient information is not currently available to forecast future production estimates. Preliminary assessments indicate that the impacts are likely to result in the deferral of significant production in the near-term (fourth quarter of 2025 and the year 2026) as repairs are completed and a phased restart and ramp-up of operations commences. A return to pre-incident operating rates could potentially be achieved in 2027.
Shares in Australian copper miners were up sharply in early trade, with Capstone Copper Corp (ASX: CSC) more than 8% higher at $12.18, Sandfire Resources Ltd (ASX: SFR) up 7.4% to $13.63, and Rio Tinto Ltd (ASX: RIO) up 3.3% to $121.38.
Shares in BHP Group Ltd (ASX: BHP), which mines copper at the massive Olympic Dam mine in South Australia, as well as the major Escondida mine in Chile, were 2.9% higher at $41.44.
At the smaller end of the market, shares in South Australian copper miner Hillgrove Resources Ltd (ASX: HGO) were more than 10.5% higher at 4.2 cents.
Freeport-McMoran said it had declared force majeure over its copper supply contracts, and intended to seek recovery of damages under its insurance policies which cover it for losses up to US$1 billion.
It said a phased restart of GBC could begin in the early half of 2026.
Under this phased restart and ramp-up scenario, which is subject to a number of factors and could change, PT Freeport Indonesia production in 2026 could potentially be approximately 35% lower than pre-incident estimates (previous production estimates for 2026 approximated 1.7 billion pounds of copper and 1.6 million ounces of gold).
