Freeport-McMoRan has declared force majeure at its Grasberg block cave mine in Indonesia after a significant mud rush incident impacted operations.
The company anticipates a reduction in copper and gold sales due to the disruption.
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According to Freeport, around 800,000 tonnes (t) of wet material entered the mine on 8 September, affecting multiple levels including crucial service areas.
The company confirmed two fatalities as of 20 September, while search and recovery efforts were on for five missing members.
On 9 September, Freeport announced the temporary suspension of operations at the mine to prioritise the rescue mission.
The incident has led to extensive damage across the mine’s infrastructure, affecting mobile equipment, rail systems and electrical installations.
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By GlobalDataFreeport is currently investigating the cause, with external experts involved in the process, which is expected to conclude by the end of 2025.
Freeport board chairman Richard Adkerson and president and CEO Kathleen Quirk said: “We are grieving for our coworkers lost in this tragic incident and extend our sincere condolences to the families who lost loved ones and who remain missing.
“We recently visited the site to offer support to the families and express our appreciation for the extraordinary efforts of the PTFI [PT Freeport Indonesia] organisation and the emergency response team.”
The Grasberg mine accounts for half of Freeport’s proven and probable reserves and 70% of its projected copper and gold output through 2029.
In light of the incident, the company is re-evaluating its production forecasts, with preliminary assessments indicating a delay in significant output until repairs and a phased restart are completed.
Pre-incident production levels are not expected to resume until 2027.
Freeport anticipates a phased restart of unaffected sections by late 2025.
The Grasberg block cave is expected to begin a gradual ramp-up in early 2026, with full recovery targeted for 2027.
The company is anticipating a 35% decrease in 2026 production compared to previous estimates.
Furthermore, Freeport has notified commercial partners of the force majeure declaration under its contractual obligations.
The company plans to seek insurance recovery for damages, subject to policy limits and deductibles.
