Grasberg Processing Reaches 67% of Normal Levels as Recovery Plan Extends Into 2027
Key Facts
Freeport-McMoRan said operational recovery at its Grasberg mine in Indonesia is proceeding as expected, with production continuing to ramp up gradually after the mudflow incident in September 2025. Average ore processing in the third quarter of 2026 was about 140,000 metric tons per day, equivalent to roughly 67% of normal pre-incident levels. That average included about 70,000 tons per day from the Grasberg Block Cave mine. In its operational update issued on October 2, the company said the gradual production ramp-up was continuing. Recovery stages extend into 2027, making the pace of capacity restoration a key focus for monitoring copper and gold supplies from the complex.
The external mudflow occurred in September 2025, according to the company's description, and affected the underground Grasberg Block Cave mine. Reuters said the incident killed seven workers and halted operations for nearly a month. Grasberg is the world's second-largest copper mine and largest gold mine, according to Reuters. The mine's scale and its previous shutdown put its return to normal operations at the center of global supply monitoring. Freeport says recovery is proceeding in stages, with technical work and preparations to restore production from additional mining blocks.
The company expects to complete upgrades to the material-handling system at the Block Cave mine's haulage level in early 2027. It is also continuing preparations to resume production from the 1S production block, targeting a return by mid-2027. Freeport is targeting 80% of production capacity by the middle of that year, then a level close to full capacity by year-end. These timelines reflect that restoring processing depends not only on continued current mining, but also on upgrading the handling system and restarting a production block. The company said it expects to reach these milestones as part of its announced recovery plan.
On downstream processing, Freeport's smelter in East Java resumed operations in late August 2026, after a temporary suspension following the Grasberg incident. The smelter has therefore returned to operation before the mine has fully restored its capacity, while the company continues to gradually increase ore processing at Grasberg. Freeport said unusually dry weather in Indonesia was generally favorable for mining, but posed challenges for milling operations. It added that those challenges were being managed with limited impact as of the update. The distinction between the smelter's operation and the recovery of mining remains important to understanding the complex's operating timeline.
In its sales outlook, Freeport estimated consolidated copper sales of about 3.0 billion pounds in 2026, including 875 million pounds in the fourth quarter, and forecast gold sales of 649,000 ounces for the year. In July, the company had forecast consolidated copper sales of about 3.1 billion pounds in 2026 and 3.8 billion in 2027, before revising the estimates to 3.0 billion and 3.7 billion, respectively. Chief Financial Officer Marie Robertson attributed the lower 2026 estimate to a slight decline in production in the United States and Chile, and linked the 2027 revision to updated mine plans. The company said its new forecasts came alongside progress in Grasberg's recovery. The sales figures show that the revision is not limited to the Indonesian mine's recovery path alone.
Freeport recorded copper production of 832 million pounds in the third quarter, down 9% year over year, while the average realized copper price rose about 40% to $6.54 per pound. Adjusted profit of more than 88 cents per share exceeded the average analyst estimate of 81 cents, according to LSEG data cited by Reuters. Average copper prices on the London Metal Exchange rose 43% year over year during the quarter, supported by supply disruptions and resilient demand in China. By contrast, gold sales fell 68.7% to 105,000 recoverable ounces, affected by the timing of shipments and refining in Indonesia. Freeport shares closed at $66.14 on October 29, according to L7 data.