Copper Crunch 🟤

You wake up and switch on the lights in your room — the wiring in your walls is lined with copper. You check your phone for messages — the circuits inside run on copper. Then you turn on the kettle or coffee machine, both of which are powered by copper wiring. From AI chips to cars to computers, it’s everywhere and in everything you use. In short, copper powers modern life. 

And copper is not just any metal. It’s the bellwether of the global economy — and nowhere is that pulse tracked more closely than on the London Metal Exchange (LME), the world’s benchmark marketplace for industrial metals. 

So when, in September 2025, LME copper prices climbed to a 15-month high of $10,485 per metric ton — just shy of the record $11,104.50 set in May 2024 — the market sat up and took notice. Copper bulls were snorting with excitement. 

But this was no random rally. It was the market’s reaction to the biggest supply disruption of 2025.

On September 8, 2025, disaster struck Indonesia’s Grasberg mine — the world’s second-largest copper mine. Approximately 800,000 metric tons of wet material suddenly rushed through multiple mine levels, killing seven workers and forcing an immediate suspension of operations.

In this issue of CrossDock, we break down why the Grasberg mine matters, how the September incident is reshaping global copper supply chains that are already strained, and finally, what it means for the world’s clean energy ambitions and the data center boom. 

However, before we examine the ripple effects, it’s worth stepping back to understand the history of Grasberg — and why this single site holds such significance in the world’s copper story.

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Like many major discoveries, the Grasberg mine was found by accident. In 1936, Dutch geologist Jean Jacques Dozy joined the Carstensz Expedition in then Dutch New Guinea to explore and climb Mount Carstensz — the highest peak on the island.

While climbing the peak, Dozy spotted a strange greenish-black rock outcropping on the mountainside. Curious, he took samples and wrote down his observations in his journal. He named the formation Ertsberg, which means “Ore Mountain” in Dutch, because of its rich iron content.

But unfortunately, a much bigger global event — World War II — overshadowed his discovery.

For nearly two decades, Dozy’s findings went unnoticed. Then, in 1959, geologists at the mining company called Freeport Sulphur (now called Freeport-McMoRan) came across his old report. Intrigued by the description of a mountain of pure ore in such a remote location, they decided to investigate.

An expedition led by Forbes Wilson in 1960 confirmed Dozy's findings. They discovered that the Ertsberg was an incredibly rich deposit of copper and gold. 

But Freeport faced two enormous problems. The first was political instability. The area, then known as Dutch New Guinea, was in a state of transition as control was being transferred from the Netherlands to Indonesia. The second problem was the location. The mine was at 4,100 meters above sea level, situated in terrain far harsher than almost any other major copper mine. With no roads, ports, or power lines nearby, every piece of equipment had to be hauled through dense rainforest and steep mountains.

The rise of President Suharto's pro-investment government in the mid-1960s resolved the political issue, culminating in Freeport's signing of the landmark Contract of Work in 1967. This granted Freeport exclusive rights to explore, mine, and export minerals within the area encompassing the Ertsberg region.

With the legal rights secured, Freeport embarked on a monumental engineering challenge — building a mine, a town, and the entire supporting infrastructure from scratch between 1967 and 1972. Over just a few years, crews carved out a 116-kilometer road and pipeline, constructed a port, airstrip, and power plant, and built a new town called Tembagapura, which literally translates to Copper Town.

The first ore shipment took place in late 1972, and the mine was officially inaugurated in 1973. According to a study published by the Australasian Institute of Mining and Metallurgy, by 1989, the mine had produced approximately 29 million tonnes of ore, including 670,000 tonnes of copper and around 15 tonnes of gold. 

Until the 1980s, Freeport had barely scratched the surface of the massive deposit it was sitting on.

By the late 1980s, Freeport's geologists, driven by the belief that the area held more secrets, turned their attention to a nearby, unassuming peak known only as Grasberg, or "Grass Mountain." From the surface, it did not reveal the treasure hidden beneath its grassy slopes.

In 1988, a deep drilling program struck the ultimate prize — a massive orebody containing huge amounts of copper and some of the richest gold grades ever discovered.

This discovery changed everything. 

In 2024, the Grasberg mine produced 815,000 metric tons of copper, accounting for around 4% of the world’s total copper supply that year.

But nature has a way of reminding even giants of their fragility — and on September 8, 2025, Grasberg faced its biggest test yet.

Grasberg’s mountainous location, heavy rainfall, and decades of mining activity make it naturally prone to landslides and flooding. Over the years, the mine has faced multiple fatal incidents — including a 2013 tunnel collapse that killed 28 workers and landslides in 2017 that disrupted operations.

In many ways, the September 2025 mudslide wasn’t a surprise — it was the result of running a massive mine in such a dangerous and unpredictable environment.

On September 8, 2025, a massive mudslide hit the Grasberg copper mine. Approximately 800,000 tons of water-saturated debris from the nearby depleted open pit suddenly flooded into the underground block cave mining area. This unexpected surge trapped and killed seven miners underground. 

The mudslide also brought Grasberg’s operations to a sudden, grinding halt. Underground mining was suspended immediately as emergency teams scrambled to assess the damage and launch rescue efforts. Access tunnels were blocked, key infrastructure was flooded, and power to several sections of the mine was cut off. 

Sixteen days after the incident, on September 24, Freeport-McMoRan declared force majeure on concentrate shipments from its Indonesian operations — a legal step that allows companies to suspend delivery obligations when unforeseen disasters make normal operations impossible. 

“As a result of the incident and the impact on operations, PTFI is notifying commercial counterparties of a force majeure in accordance with the provisions of its contracts,” Freeport said in a statement.

In simpler terms, it means Freeport told its customers it couldn’t meet supply commitments because the mine was effectively shut down.

The company also announced that copper and gold output could be about 35% lower in 2026 than previously estimated. 

Freeport said PT Freeport Indonesia’s fourth-quarter copper and gold sales will be minimal, falling far short of earlier projections of 445 million pounds of copper and 345,000 ounces of gold.

According to Benchmark Mineral Intelligence, the fourth-quarter output drop at Grasberg will match the entire annual production forecast for Collahuasi, the world’s third-largest copper mine.

Freeport has indicated that a full return to pre-accident production levels at Grasberg may not happen until 2027. 

Immediately after the announcement, Freeport-McMoRan shares plunged over 15% in a single trading day, one of the steepest drops in recent years

It is worth noting that the world’s second-largest copper mine was initially forecast to produce 1.7 billion pounds of copper and 1.6 million ounces of gold in 2026. 

What does this mean for the global copper supply? Let’s break it down.

Before the mudslide, the global copper market was expected to produce approximately 22.5–23 million metric tons in 2025, according to projections from the International Copper Study Group (ICSG).

But that picture has now changed dramatically. 

Benchmark Mineral Intelligence goes even further, estimating that the disruption could remove up to 591,000 tonnes from the market between late 2025 and the end of 2026 — roughly 2.6% of global mine output.

Analysts from Barrenjoey Capital Partners' metals and mining expect around 900,000 tonnes of copper to be missing from the market in 2026. The ICSG has also lowered its mine production growth forecast for 2025 to 1.5%. 

Yes, Grasberg may have grabbed the headlines, but it’s far from alone. Around the world, copper mines have been hit by a wave of disruptions.

The trouble began in May, when flooding struck the Kamoa-Kakula mine in the Democratic Republic of the Congo, a site renowned for its ultra-high-grade copper.

A couple of months later, in July, an accident at Chile’s El Teniente mine dealt another blow. El Teniente is the largest underground copper mine in the world and a pillar of Chile’s copper industry. Codelco, the state-owned company that operates the mine, reported a loss of 33,000 metric tons of copper and cut its 2025 production forecast.

Then, in October, disruption struck again — this time in Peru, the world’s second-largest copper producer. Social unrest forced Hudbay Minerals to halt operations at the Constancia mine, another key source of global supply.

Three incidents across three continents in less than six months have strained global copper supply and added pressure to an already tight market.

And if that’s not enough, Teck Resources, the Vancouver-based miner that announced a $53 billion merger with Anglo American, cut its production guidance for the next two years. For 2025, Teck now expects to produce between 170,000 and 190,000 tonnes of copper, down from its earlier forecast of 210,000 to 230,000 tonnes. 

The outlook for 2026 has also been lowered to 200,000–235,000 tonnes, compared to a previous range of 280,000–310,000 tonnes. Teck’s downgrade removes one of the few new sources of supply the market was counting on, exacerbating the copper shortage.

All these shocks are now clearly reflected in copper prices. In September 2025, copper hit $10,485 per metric ton on the LME, its highest level in 15 months. In October, prices held firm above $10,300. With major mines offline, new supply delayed, and demand still strong, copper is becoming increasingly scarce, and prices are expected to continue rising. 

For instance, Bank of America raised its copper price forecasts for 2026 and 2027 by 11% and 12.5%, to $11,313 per ton and $13,500 per ton, respectively.

Another looming supply threat is the output of refined copper — the essential form needed for industrial use — as smelters grapple with shrinking margins, tight concentrate supplies, and mounting pressure to cut production.

Let’s take the example of China and Japan, the top countries with copper refining capacity. In Japan, one of the world’s top smelting hubs, JX Advanced Metals has announced plans to slash copper output by tens of thousands of tonnes in 2025 and outlined a capacity reduction plan for 2026. Mitsubishi Materials, another Japanese heavyweight, is also reportedly weighing similar cuts as the concentrate shortage deepens.

The International Copper Study Group (ICSG) now expects the global refined copper market to swing to a 150,000-tonne deficit in 2026.

In short, fewer copper ores mean less refined copper, and that shortage will ripple through everything — from industrial manufacturing to clean energy projects and the fast-growing data center sector.

Copper is one of the best power conductors on the planet — and it sits at the heart of the world’s push toward electrification. From EVs and solar panels to wind turbines, power grids, and AI data centers, copper is the metal that makes modern infrastructure work. 

For example, according to the International Copper Association, a single battery-powered EV uses 80–90 kg of copper, nearly four times more than a conventional gasoline car. Solar farms and offshore wind projects are even more copper-intensive. 

Then there are data centers, the backbone of the AI revolution. A single hyperscale data center uses up to 30 tonnes of copper for power cables, cooling, and electrical systems. Demand for AI-related technologies is expected to grow sixfold by 2050, making copper essential for powering the world’s digital infrastructure.

A recent report by Macquarie estimates that between 330,000 tonnes and 420,000 tonnes of copper will be used in data centers by 2030. The International Energy Agency (IEA) projects that global copper demand will double by 2040. 

Yet supply is falling dangerously behind.

According to experts, the world needs to add roughly 1 million tonnes of new copper production each year to stay on track — but in the past three years, it has managed only about half of that. Recent disruptions at Grasberg and other mines are projected to further widen the gap. 

According to the IEA’s Global Critical Minerals Outlook, copper supply is projected to fall 30% short of demand by 2035 if no major new projects are developed. IEA Executive Director Fatih Birol told The Guardian, “This will be a major challenge. It’s time to sound the alarm.”

Without any doubt, copper is the metal that powers electrification, underpins the clean energy transition, and keeps the digital world running. But if recent events have shown us anything, it’s this: the copper supply chain is far more fragile than the world has assumed.

For years, the conversation around copper shortages has been framed as a future challenge, something to worry about in 2030 or beyond. But the supply shock has already arrived and is unfolding in real-time.

Experts warn that the real impact will become even clearer over the next four to five years as deficits deepen. And how governments and industries respond now will determine whether copper becomes a bottleneck or a backbone of the future economy.

This newsletter was written by Shyam Gowtham

Thank you for reading. We’ll see you at the next edition!