Grasberg Copper Disruption Cuts Freeport Output but Supports 2026 Recovery Story

Grasberg copper mining

Grasberg copper disruption drove a steep decline in Freeport copper output in 2025. The company produced 3.38bn lb of refined copper. That was down from 4.21bn lb in 2024. As a result, Indonesia copper production became the main drag on group performance.

However, higher metal prices protected earnings despite weaker copper volumes. Freeport realised an average copper price of $4.75/lb in 2025. That was above $4.21/lb a year earlier. Meanwhile, Freeport molybdenum production also rose and added further support.

Indonesia Copper Production Became Freeport’s Main Weak Spot

Indonesia copper production fell sharply after the September suspension at Grasberg Block Cave. Freeport’s Indonesian copper output dropped to 1.02bn lb in 2025. That compared with 1.8bn lb in 2024. Therefore, Grasberg copper disruption reshaped the company’s regional balance.

Fourth-quarter performance showed the full impact of the disruption. Copper production fell by 62pc year on year to 640mn lb. Sales still beat internal guidance because inventories in Indonesia declined faster than expected. However, quarterly sales remained far below late-2024 levels.

Regional trends outside Indonesia looked mixed rather than weak. US copper operations improved on better ore grades and leaching activity. South American production declined because of lower grades and lower throughput. As a result, Freeport copper output depended heavily on the lost Indonesian volumes.

Freeport Molybdenum Production and Higher Prices Supported Profitability

Freeport molybdenum production helped offset the copper shock in 2025. Molybdenum output rose to 92mn lb from 80mn lb. Sales also increased to 83mn lb from 78mn lb. Consequently, by-product strength softened the earnings impact from copper losses.

Higher realised prices also improved Freeport’s financial resilience. Fourth-quarter realised copper prices climbed to $5.33/lb from $4.15/lb a year earlier. Molybdenum prices also moved higher. Therefore, stronger pricing helped the company post better profitability despite lower output.

Freeport’s fourth-quarter net income rose to $406mn from $274mn a year earlier. Unit cash costs increased in the fourth quarter because Grasberg volumes fell. Still, costs remained below earlier company estimates. That result showed disciplined cost control under difficult operating conditions.

Freeport now expects a phased Grasberg restart from the second quarter of 2026. It aims to restore about 85pc of normal production in the second half. Consolidated copper sales are forecast at around 3.4bn lb in 2026. Therefore, the market will watch execution in Indonesia very closely.

The Metalnomist Commentary

Freeport’s 2025 results show how one major asset can still dominate global copper narratives. Grasberg copper disruption hurt volumes, but price strength and molybdenum kept margins alive. If the 2026 restart stays on track, Freeport could re-enter the market with much stronger operating leverage.