Global Copper Deficit Balloons as Grasberg Collapse Joins Year of Disruptions

The global copper market has had quite the year. On September 8, approximately 800,000 tons of wet material flooded multiple levels of the Grasberg Block Cave mine in Papua, Indonesia, leading to the suspension of all underground operations. It was just one more event to add to the list of copper mining and supply disruptions for 2025.

According to reports, the wet material flood reached the level of the mine where a team of workers was conducting development activities, leading to two confirmed fatalities. Meanwhile, Freeport-McMoRan Inc. has now declared “force majeure,” an inability to fulfill contractual obligations due to natural disaster, war or incidents beyond the control of the owner/operator.

Grasberg is the world’s second-largest copper mine, contributing over 3% of global supply. As such, this new disruption will undoubtedly impact not only Q4 sales of copper and gold, but also supply in 2026. While the original forecasted production was about 1.7 billion pounds of copper and 1.6 million ounces of gold, Grasberg’s output next year has now been pruned to 35% lower. Full recovery is not projected until 2027, pending phased restarts next year.

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The 2025 Copper Supply Disruption List

The disruption at Grasberg adds to a string of 2025 setbacks in the copper sector, including:

•   Tunnel collapse at Codelco’s El Teniente mine in Chile
•   Flooding at Ivanhoe’s Kakula mine in the Congo
•   Operational issues at Teck Resources and Anglo American

On July 31-August 1, 2025, a tunnel collapse triggered by an tremor killed six workers and forced a complete shutdown of underground operations at the El Teniente mine in Chile. Codelco, Chile’s state-owned mining company, halted all extraction and placed the Caletones smelter on care and maintenance after exhausting stockpiled ore. El Teniente produces approximately 400,000 metric tons of copper annually, making it a significant contributor to the copper market.

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Grasberg Could Affect Copper Market Into 2027

Even before the Grasberg mine episode, experts estimated that about 497,000 tonnes of copper had been lost to mine disruptions as of the end of August. With the loss of the Indonesian mine, the global copper market suddenly looks even more bleak. A Reuters report quoting analysts at Benchmark Mineral Intelligence, estimates that nearly 600,000 tons of contained copper will be lost between September 8 and the end of 2026 due to the Grasberg disruption alone.

The collapse marks a pivotal moment in global copper market supply dynamics. The timing couldn’t be worse: copper demand is climbing rapidly due to its critical role in electronics, renewable infrastructure and data centers. With mounting disruptions across key producers, the incident underscores the fragility of mining infrastructure and the urgency of investing in safety, automation and resilient logistics. Analysts claim that the ripple effect of these supply issues will not only be felt in 2026, but also in 2027.

Price and Trade Effects Following Grasberg Disruption

The 20 largest copper mines are expected to contribute 36% of global production in 2025. However, almost every site seems to be grappling with its own distinct mix of geological complexities, operational hurdles and social pressures. BMI has sharply increased its projected copper supply deficit for 2026, revising the shortfall from a modest 72,000 tons to a substantial 400,000 tons. Citi has echoed this outlook, forecasting a comparable deficit next year and warning of an additional 350,000-ton gap in 2027 unless copper prices climb significantly to stimulate new supply.

What’s more, Goldman Sachs has now revised many of its copper projections for 2025 and even 2026. This comes as Grasberg’s individual output could drop by approximately 260,000 tons in 2025 and 270,000 in 2026. Overall, the bank projects a total copper mine supply loss of 525,000 metric tons due to the disruption, prompting a downward revision of its global output forecast by 160,000 tons for the second half of 2025 and 200,000 tons for 2026.

Following the September 8 disruption, copper futures surged to US $10,485 per ton, a 15-month high. Such a price surge was also seen when production at El Teniente was disrupted, after which prices jumped 12% to US $9,707.50 per ton.

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