Grasberg and Kamoa-Kakula Disruptions Reshape Global Copper Concentrate Flows

The global copper concentrate market is experiencing its most severe supply crisis in decades. At Grasberg, Freeport-McMoRan declared force majeure in September 2025 after a tailings leak accident and subsequent mud intrusion halted operations. The company now expects 2026 production approximately 35% below previous estimates, representing a loss of roughly 270,000 tonnes of copper output versus pre-disruption forecasts.

At Kamoa-Kakula in the Democratic Republic of Congo, flooding and seismic activity in 2025 forced production cuts with full recovery not expected until after 2026. Ivanhoe Mines trimmed its output outlook, further tightening concentrate availability for a global smelting industry already operating on thin margins.

The supply shock is most visible in treatment and refining charges (TC/RCs), which have fallen to unprecedented negative levels. Spot TC/RCs reached minus $60 per tonne and minus 6.02 cents per pound by March 2026, meaning smelters are paying miners to take concentrate — a clear signal of acute shortage. The Argus weekly TC index deteriorated from minus $44.60/t at end-2025 to minus $60.20/t, with no relief in sight.

Chinese smelters in the CSPT have pledged to cut concentrate intake by more than 10% due to squeezed margins. Japanese smelters including Pan Pacific Copper and Mitsubishi Materials have confirmed plans to reduce smelting capacity. Smelter utilization rates have fallen from 90%+ in 2022-2023 to approximately 82-85% in 2025.

The paradox facing the industry is that rebalancing the concentrate market requires smelter production cuts, which would simultaneously worsen shortages in the refined copper market. This structural tension underpins the bullish outlook for refined copper prices through 2026 and into 2027.