According to foreign media reports, PT Freeport Indonesia is continuing development of the Kucing Liar underground copper-gold mine within the Grasberg minerals district in Central Papua, with initial mining targeted for 2029 and production expected to ramp up thereafter. The project is being developed as a long-term source of replacement supply as production from the Deep Mill Level Zone declines. Development of the underground deposit has been underway for several years and requires substantial investment in mine access and supporting underground infrastructure. Recent reports indicate that approximately $1.4 billion has already been invested, with a further roughly $4 billion expected through 2033 as development progresses. At full operating rates, Kucing Liar is expected to process approximately 130,000 tonnes of ore per day and produce around 750 million lb of copper annually, equivalent to roughly 340,000 tonnes, alongside approximately 735,000 oz of gold. Freeport-McMoRan currently estimates that the deposit could contribute more than 8 billion lb of copper through 2041. From a copper-market perspective, Kucing Liar represents a significant source of prospective long-term mine supply from the Grasberg district. Its development is particularly important because it is intended to help offset declining output from mature underground areas and sustain Freeport Indonesia's large-scale copper production over the longer term.

[SMM Analysis: High Imports Yet Lower TCs: Why China’s Copper Concentrate Market Is Getting Tighter amid Rising Purchases] In H1 2026, China’s copper concentrate imports stayed high but edged down YoY, with the pace of imports slowing noticeably in Q2 compared with Q1. At the same time, new and expanded smelting capacity continued to come onstream, and growth in copper concentrate demand outpaced the increase in import supply, driving spot TCs further down. On July 24, the SMM Imported Copper Concentrate Index (weekly) fell to -$154.76/dmt, further highlighting the contradiction of high imports coexisting with deeply negative TCs. Looking ahead to H2, stockpiling, feeding, and production ramp-up at three new smelting projects in China will add to rigid procurement demand. Higher production from Oyu Tolgoi, a seasonal recovery in South American mine output, and shipments of some stockpiled ore are expected to support a QoQ increase in China’s copper concentrate imports. However, the resumption of production at Grasberg will still take time, and local smelting capacity in Indonesia and Africa continues to absorb domestically produced concentrates, meaning that increases in overseas mine production may not proportionally translate into accessible supply for China. China’s copper concentrate imports are expected to remain high in H2 and rebound somewhat from H1, but the global supply-demand “hard deficit” for copper concentrates is unlikely to ease in the short term, and freely tradable, suitable supply will stay tight. In the absence of large-scale, sustained production cuts on the smelting side, spot TCs are more likely to show an L-shaped pattern of low-level operation with intermittent rebounds, and the configuration of rising imports alongside negative TCs will persist.

Freeport-McMoRan reported on Thursday that Q2 copper production declined, while Q2 profit exceeded expectations, as higher copper prices offset the impact of lower output at its Grasberg mine in Indonesia.Copper's average realized price for the quarter was $6.17 per pound, compared with $4.54 a year earlier.Freeport-McMoRan, headquartered in Phoenix, Arizona, suspended operations at its Grasberg mine in Indonesia after approximately 800,000 metric tons of wet material flooded the site on September 8.

On July 24, the SMM Imported Copper Concentrate Index (weekly) was reported at -$154.76/dmt, down $8.61/dmt from the previous reading of -$146.15/dmt. The 20% grade domestic trade ore payable indicator came in at 98%-99.5%, up 0.25% from the prior period. This week, transaction volumes in the copper concentrates spot market decreased from last week, with some mines conducting tenders. In spot transactions, a trader sold 10,000 mt of clean ore for September shipment to a smelter at an index minus $20/dmt, QP: M+1/M+5; a trader sold 20,000 mt of clean ore for Q4 shipment to a smelter at an index minus $20/dmt, QP: M+1/M+5; a trader sold approximately 2,000 mt of clean ore in containers for August-September shipment to a smelter at an index minus $18-19/dmt, with a container premium in single digits, QP: M+1/M+5. In terms of mine tenders, regarding the previously offered Red Chris by Newnomont, market rumors suggest that the transaction price for 20,000 mt for trader-side shipments in September 2026 and Q4 was around -$225/dmt, while the 2027 20,000 mt transaction price was in the range of -$220/dmt to -$200/dmt. For a large mine's tender of South American clean ore, the trader-side transaction price was -$230/dmt for 10,000 mt, QP: M+1/M+4, with September shipment; the smelter-side transaction price was -$158/dmt for 10,000 mt, QP: M+1/M+4, with September shipment. For the OT mine tender, trader-side prices were -$230/dmt for September-December shipment, QP: M+1/M+4 (buyer's option), and -$225/dmt for November-December shipment, QP: M+1/M+4 (buyer's option); smelter-side prices were -$160/dmt for September-December shipment, QP: M+1/M+3 (buyer's option). In addition, according to market sources, KAZ is conducting tenders for Aktogay and Bozshakol copper concentrates, with results yet to be announced. Overall, spot transactions this week were still dominated by the index-minus model, but the pace of further widening of discounts slowed down compared with earlier. The downward momentum in trader-side tender prices also slowed noticeably; however, smelter-side transaction prices continued to decline, with procurement conditions worsening and raw material procurement pressure intensifying. On July 23, Freeport-McMoRan disclosed during its Q2 earnings call that the resumption of production at the underground Block Cave project at the Grasberg mine in Indonesia is progressing as expected. Currently, the ramp-up of production blocks 2 and 3 is advancing in accordance with the plan set in April. Previously, affected by a mud rush incident at the underground mine in September 2025, Grasberg partially suspended production. The company subsequently initiated cleaning, repair, and phased production resumption work. According to Freeport, Grasberg Block Cave completed repairs in Q1 2026, began production ramp-up in March, and reached planned operating levels in Q2. Currently, the company expects that Grasberg’s capacity will recover to about 65% in H2 2026, further increase to about 80% by mid-2027, and it plans to approach full operation by the end of 2027. Recently, heavy rainfall and high-altitude snowfall hit central Chile and the Atacama region, prompting multiple copper mines to initiate winter emergency measures. Antofagasta Minerals’ Los Pelambres temporarily restricted access to the mine site and proactively reduced non-critical operations; no full suspension has been reported so far. Codelco’s Andina suspended surface operations, while El Teniente temporarily halted open-pit ore transport due to snow accumulation on slopes. Among these, Caserones was the most significantly affected. Lundin Mining stated that the mine had been shut down since July 18 due to heavy snow, limited road access, and an on-site power outage, and was currently relying on backup generators to maintain critical activities, with production expected to resume after power restoration and improved access conditions. As of July 24, the company had not yet issued a resumption notice, but Lundin Mining maintained its full-year production guidance. Overall, this disruption was mainly concentrated in central Chile and some high-altitude mining areas, while the major copper mines in the far north largely maintained operations, and no widespread nationwide shutdowns had occurred. On July 24, SMM copper concentrate inventories at eleven ports stood at 661,500 mt in physical content, up 13,300 mt in physical content from July 17. The main increases came from Yantai Port and Qingdao Port, up 32,100 mt and 20,000 mt WoW, respectively; the main decreases were from Qinzhou Port and Huludao Port, down 18,000 mt and 7,000 mt WoW, respectively.

During Freeport-McMoRan’s Q2 earnings call, the company disclosed that the block cave underground project resumption of production at the Grasberg mine in Indonesia is progressing in line with expectations, with ramp-up at Production Block 2 and Block 3 proceeding according to the plan formulated in April. Production at Grasberg was partially suspended earlier due to the September 2025 wet ore inflow incident in the underground mine, after which the company initiated cleaning, repairs, and phased production resumptions. According to Freeport, repair work at the Grasberg Block Cave was completed in Q1 2026, and production resumption ramp-up began in March, reaching planned operating levels in Q2. The company currently expects Grasberg capacity to recover to approximately 65% in H2 2026, further improve to around 80% by mid-2027, and plans to approach full capacity by the end of 2027. On production, Freeport expects the Grasberg mine to produce a cumulative total of approximately 6.8 billion pounds of copper from 2026 to 2030, averaging about 1.4 billion pounds per year. Copper production is expected to rebound significantly after 2027 as the Block Cave capacity gradually resumes. Additionally, Freeport noted that Grasberg still has expansion potential, with the Kucing Liar project under development. Ramp-up is expected to begin around 2030, with an expected incremental copper capacity addition of 750 million pounds per year once full production is achieved.

Looking ahead to H2, macro attention should be on the US Fed’s subsequent interest rate hike moves and the pending results of the Section 232 tariff survey.