Freeport-McMoRan FCX Shares Drop 6.69% as Grasberg Mine Disaster Halts Production Until 2026

Freeport-McMoRan Inc. (FCX) shares fell to their lowest level since April 2025 on September 25, with an intraday decline of 6.69% as the stock extended its two-day losing streak by 22.09%. The sharp selloff followed a catastrophic incident at the company’s Grasberg mine in Indonesia, where a mud rush on September 8 caused two fatalities and left five workers missing. The mine, a critical source of global copper and gold supply, remains suspended indefinitely, with production unlikely to resume until 2026 and full capacity not expected until 2027.

The Grasberg mine accounts for 3% of global copper output and 1.6 million ounces of annual gold production. Its shutdown has tightened copper markets, pushing prices higher in the immediate aftermath of the incident. However, the long-term financial impact on Freeport-McMoRan is severe, with third-quarter sales projected to drop by 4% for copper and 6% for gold. The company faces potential $3.5 billion in 2026 EBITDA losses, reducing its forecasted earnings from $12.5 billion to $9 billion. Analysts note that Grasberg contributes 30% of FCX’s total revenue, amplifying the operational and financial risks posed by the disruption.

Insurance coverage of up to $1 billion after a $500 million deductible may partially offset direct losses, but does not address prolonged production delays or reputational damage. Institutional investors, including Vanguard and State Street, have reduced stakes in the stock, reflecting cautious sentiment. Analyst ratings have shifted, with several firms downgrading FCX to “Hold” or lowering price targets amid uncertainty over recovery timelines. While some analysts remain optimistic about long-term copper demand, the incident has exposed vulnerabilities in the company’s operational resilience, particularly given Grasberg’s history of major accidents, including a 2013 tunnel collapse.

The phased restart of operations will require significant capital and regulatory approvals, with full production recovery unlikely before 2027. Market participants are closely monitoring production timelines and copper price trends, as the mine’s shutdown could tighten markets for 12–18 months. Freeport-McMoRan’s financial metrics, including a debt-to-equity ratio of 0.30 and current ratio of 2.47, suggest stability, but prolonged disruptions could strain liquidity. Investors face a complex risk-reward trade-off, balancing long-term copper demand fundamentals against near-term operational uncertainties.