Indonesia's copper smelting sector faces short-term supply uncertainty after PT Smelting's Gresik smelter suspended operations following a boiler leak on August 8, according to market sources. The smelting facility would remain offline for several weeks to undergo assessment and repairs, with no confirmed restart date. PT Smelting, located in East Java, processes copper concentrate from the Grasberg mine and is jointly owned by Mitsubishi Materials Corporation and PT Freeport Indonesia. Mitsubishi has confirmed the operational suspension.
Meanwhile, PT Freeport Indonesia said on August 10 that its Manyar smelter is scheduled to resume production in September as copper concentrate output from the Grasberg mine gradually recovers. The company has been prioritizing concentrate supplies to PT Smelting during the initial recovery phase following last year's fatal mudflow accident at Grasberg, but shipments have recently started increasing and are now being redirected to Manyar.
The Grasberg mine in Papua, one of the world's largest copper-gold deposits, remains in a recovery phase after mining operations were disrupted by the mudflow incident in September 2025. Freeport expects the mine to gradually ramp up production and approach full recovery by the end of 2027 to early 2028, with annual copper output projected at around 700,000 tonnes.
According to PT Freeport Indonesia, the two East Java smelters, Manyar and PT Smelting, are expected to produce nearly 400,000 tonnes of refined copper combined in 2026. However, the temporary shutdown of PT Smelting could tighten regional refined copper availability in the near term, particularly given already constrained global copper concentrate supply and historically low treatment charges. Any prolonged outage could provide additional support to copper prices and regional premiums.
Looking ahead, the planned restart of the Manyar smelter and the gradual recovery of Grasberg production should help ease supply concerns over the medium term. However, with the mine unlikely to return to full capacity until late 2027, Indonesia's copper supply recovery remains a gradual process, leaving the global copper market vulnerable to further short-term disruptions.
Written by Mingyuan Wang, wangmingyuan@mysteel.com
