Accident at World’s No.2 Copper Mine Tightens Supply and Lifts Copper Prices — Hong Kong Concept Stocks Included

A large mudslide at Indonesia’s Grasberg mine has exacerbated already constrained global copper supplies, causing two fatalities and leaving five personnel unaccounted for, and prompting Freeport‑McMoRan Inc. to declare force majeure. The incident occurred amid surging demand for copper driven by the energy transition and accelerated deployment of artificial‑intelligence technologies, both of which have increased consumption of the metal essential to electronic manufacturing.

Grasberg, which supplies about 3% of global copper output, is a critical node in the market. Freeport, headquartered in Arizona, warned on Wednesday that it may be unable to meet contractual deliveries from the affected mine and simultaneously cut its copper and gold production guidance for the quarter. The announcement surprised market participants and sent London Metal Exchange copper prices above $10,300 per tonne, approaching the May 2024 record of $11,104.50 per tonne.

Market strategists highlight the scale and timing of the disruption. Helen Amos of BMO Capital Markets described the event as large‑scale and noted it comes at a moment when supply is already tight, a combination that could establish a structurally higher price environment. Freeport’s share price fell nearly 17% on Wednesday, marking its steepest single‑day decline in five years.

Research from UBS points to limited incremental supply, constrained refined output and renewed traditional demand as factors sustaining support for prices into 2026 and 2027. The bank raised its copper price forecasts for this year and next by 3%, adjusting them from $4.24 and $4.68 per pound to $4.37 and $4.80 per pound respectively.

U.S. copper miners responded sharply in the equity market on Wednesday, with Ero Copper (ERO.US) and Southern Copper (SCCO.US) gaining more than 8%, Taseko Mines (TGB.US) rising nearly 8% and Hudbay Minerals (HBM.US) advancing over 6%.

Hong Kong‑listed companies tied to the copper value chain include Luoyang Molybdenum (03993), Zijin Mining (02899), China Nonferrous Mining (01258), MMG Limited (01208), Jiangxi Copper Co. (00358) and China Railway Group (00390).