Freeport Mcmoran shares nosedive 15% after fatal incident at Indonesian mine

Shares of Freeport-McMoRan fell sharply on Wednesday after the copper and gold miner disclosed significant production setbacks tied to a fatal accident at its Grasberg operations in Indonesia. The stock dropped 15.23% to $38.45 on Wednesday, putting it on track for its largest single-day decline since April, according to Dow Jones Market Data. Despite the selloff, Freeport shares remain up about 2% so far this year.Fatal mud rush at GrasbergThe Phoenix-based company confirmed that two workers were found dead and five remain missing after a mud rush on September 8 sent 800,000 metric tons of wet material into the mine. The flow of mud and debris reached the service level where the missing employees had been working, halting operations in one of the world’s largest copper and gold deposits.Mining activities in the Grasberg minerals district have been suspended since the incident, while rescue teams continue the search for the missing workers. “We are grieving for our coworkers lost in this tragic incident and extend our sincere condolences to the families who lost loved ones and who remain missing,” Freeport Chairman Richard C. Adkerson and CEO Kathleen Quirk said in a joint statement.The company declared force majeure on contracted copper and gold supplies from the mine, releasing it from certain contractual obligations due to the tragedy. The announcement triggered concern among buyers about near-term scarcity and contributed to a rally in copper futures, which rose 3.7% on Wednesday after trending lower earlier in the day.Financial impact and lowered guidanceFreeport cautioned that the suspension of mining and related infrastructure damage will have financial consequences. The company now expects third-quarter consolidated sales to come in below its previous estimates, with copper sales projected to be 4% lower and gold sales 6% lower compared to July forecasts.In July, the company had guided for consolidated third-quarter sales of approximately 1 billion pounds of copper, 350,000 ounces of gold, and 18 million pounds of molybdenum. The revised estimates suggest meaningful reductions from those levels.Looking further ahead, Freeport said its 2026 production could potentially fall 35% below prior estimates, which had forecast 1.7 billion pounds of copper and 1.6 million ounces of gold. The miner emphasized, however, that it does not yet have sufficient information to issue updated long-term production forecasts.Market reaction and global supply concernsThe Grasberg mine plays a critical role in global copper and gold supply chains. Copper concentrate produced at the site is typically shipped to PT Smelting in Indonesia, Atlantic Copper in Spain, and various third-party smelters. Earlier this year, Freeport had already warned investors of slower operations in Indonesia as it awaited repairs to a smelter damaged in a fire.Freeport’s update rattled equity markets, leaving it as the worst-performing stock in the S&P 500 at midday. At the same time, copper futures surged as traders priced in potential supply disruptions. The sharp rise in copper prices underscores the mine’s importance to global markets, where demand for the metal continues to grow amid electrification and energy transition trends.While the immediate focus remains on search and recovery efforts, the broader financial and supply implications of the Grasberg incident are likely to remain in the spotlight in the months ahead.The post Freeport Mcmoran shares nosedive 15% after fatal incident at Indonesian mine appeared first on Invezz