Aging Infrastructure, Rising Risks: The Real Copper Crisis

One month ago, on September 8, approximately 800,000 tons of mud slid into an underground portion of the Grasberg mine.

Located in Indonesia, this is one of the world’s largest copper mines.

Tragically, it killed several workers who were trapped by the immense mud-fall that flooded a section of the underground block.

The mine operator, Freeport McMoRan (NYSE: FCX), immediately suspended operations, declaring ‘force majeure,’ releasing the operator from contractual obligations in supplying copper to its customers.

And in recent days, the company confirmed that its copper and gold production will likely fall dramatically over the fourth quarter.

The Grasberg mine produced 816,466 tonnes of copper in 2024. That makes it the world’s second-largest copper mine.

An operation that accounts for around 4% of total global supply.

But one disaster follows another.

2025 has been a year marked by significant mine disasters in the copper market.

It began on February 18, 2025, when a tailings dam at a copper mine in Zambia, owned by the Chinese state-owned firm, collapsed.

Some sources state that up to 1.5 million tonnes of toxic, acidic sludge were released into the Kafue River.

The spill caused extensive environmental damage, including river contamination, fish die-offs, and disruptions to water and irrigation supplies for many people across Zambia.

The company (and authorities) are now feeling the weight of trying to deal with this disaster, including community pushback against future mining activity.

And it continues…

Then, on 18 May 2025, a major seismic event caused flooding at the Kakula mine in the DRC owned by Ivanhoe Mines (TSX: IVN).

In response, Ivanhoe suspended operations, and its share price fell sharply by around 50 per cent. Luckily, no fatalities were recorded.

However, Ivanhoe is still in the process of pumping water out of its flagship operation in the DRC.

The Kakula complex produced approximately 437,000 tonnes of copper last year. In light of the flooding, the company’s copper output is likely to drop sharply in 2025 and, perhaps, into 2026.

Two months later… And another disaster involving a major copper mine.

This time in Chile, at El Teniente, the world’s LARGEST underground copper mine.

In July 2025, a 4.2-magnitude earthquake struck approximately 500 meters underground, causing a portion of the tunnel to collapse.

Six workers died.

In response, the world’s largest copper producer (Codelco) suspended operations; however, the delay was far shorter than the above disasters.

In 2025, it’s been a case of one disaster following another in the copper mining sector… So what does that ultimately mean?

Mining Memo’s Take

From Indonesia, the DRC, to Zambia, to the world’s largest copper-producing nation, Chile.

There’s been an unprecedented number of mine disasters in the copper industry this year.

Clearly, that will have some lasting impacts on global copper supply.

The Grasberg event alone caused copper prices to spike as the market responded to concerns about future supply.

So, is it all a coincidence?

It’s important to understand that several of these disasters have involved ageing operations… For example, the Grasberg mine in Indonesia has been in operation for over 35 years.

While that might sound dated, it pales compared to some of the operations still underway in Chile.

In fact, the El Teniente copper mine (which I outlined above) first began industrial-scale operations 120 years ago, in 1905.

In other words, the world’s largest underground copper mine began production before Henry Ford had even started manufacturing gasoline-powered cars!

So, why are ageing mines a Problem?

The first one is obvious: mines typically deplete (grades decrease) over time, as miners tap into the highest-grade portions first.

But as operators dig deeper and the network of tunnels becomes more complex and tailings ponds expand, the risks of a major accident can also increase.

Deeper mines can generate more seismic activity from underground blasting.

That increases the likelihood of underground tunnel collapses, such as those at El Teniente, or major mudslides, like the one at Grasberg.

Then there are the problems happening at the surface…

Tailings dams are used to contain toxic waste from spilling out into the surrounding environment.

However, as the volume of waste increases over decades of mining production, the probability of failure also increases.

Especially in cooler, high-rainfall regions where evaporation rates can’t keep up with the volume of toxic waste being discharged into these dams.

Over time, the potential consequences grow.

Plus, with the frequency of large-scale mining disasters rising across these ageing copper mines, the appetite among communities to adopt new mines diminishes.

That makes it even more challenging for new developments to come to fruition.

Have no doubt, copper has a MAJOR supply problem.

These events collectively demonstrate why this problem is likely to worsen over the next five years.

And that can certainly present opportunities for investors, but the challenge here is in trying to pick the right stocks!