Freeport shares sink after workers trapped at Grasberg

Freeport-McMoRan (NYSE: FCX) shares sank Tuesday after the company suspended operations at its Grasberg Block Cave underground mine in Indonesia, where a surge of wet material blocked access routes and left seven workers trapped underground.

The workers have been located and are believed to be safe, the company detailed in a press release Tuesday. The incident occurred late Monday evening in one of five production blocks within the mine, located in Central Papua.

“Our team is working diligently to bring our team members to safety as quickly as possible,” chairman Richard C. Adkerson and CEO Kathleen Quirk said in a statement. “All other personnel at the site are confirmed safe.”

Shares of Freeport fell 6% by mid-Tuesday in New York to $43.85 apiece, giving the Phoenix, Arizona-based miner a market capitalization of $63 billion.

Clearing debris

Crews are currently working to clear debris and secure safe evacuation routes, while support is being provided to the trapped workers, the company said, without providing a timeline for the worker’s evacuation or the resumption of production.

The Grasberg operation is one of the world’s largest copper and gold mines, with annual output of about 1.7 billion lb. of copper and 1.4 million oz. of gold from three mines in the district. Freeport holds a 49% stake in the complex, while Indonesia’s state-owned mining company holds the majority interest.

Indonesia’s mining minister, Bahlil Lahadalia, stated on Tuesday that his team would visit the site to assess conditions and provide updates.

The suspension initially pressured copper prices. The most-active COMEX futures contract was down 0.15% at $4.552 per lb. ($10,014 per tonne) on Tuesday morning.

Freeport Indonesia has previously forecast copper concentrate output of nearly 3 million tonnes in 2025. Any extended disruption at Grasberg could add supply-side uncertainty to already tight copper markets.