Group 1 - The new mining minister of the Democratic Republic of the Congo, Louis Watum, revealed that the country loses approximately 60 tons of gold annually due to smuggling, valued at over $7 billion [1] - Watum is advocating for the establishment of new gold mining bases and is currently in negotiations for several deals, with some expected to be announced soon [1] - The international gold price has recently surged, with spot gold nearing $3,800 per ounce and COMEX futures surpassing $3,800, indicating a potential for increased revenue from gold resources in the DRC [1] Group 2 - Watum is engaging in dialogue with major copper and cobalt miners, including Glencore, Eurasian Resources Group, and China Molybdenum, to resolve historical disputes [2] - Discussions are ongoing regarding new cobalt export quotas and the development of lithium assets, aiming to attract companies like Zijin Mining, AVZ Minerals, and KoBold Metals [2] - The DRC is attempting to transform its mineral resources into sustainable economic benefits while addressing historical mining disputes and promoting long-term stability in the mining sector [2]

Commodities Research 25 September 2025 | 10:00AM SGT Eoin Dinsmore +65-6889-2401 | eoin.dinsmore@gs.com Goldman Sachs (Singapore) Pte Base Metals Comment: Copper: Grasberg Outage Knocks 1% Off 2026 Global Mine Supply Aurelia Waltham +44(20)7051-2547 | aurelia.waltham@gs.com Goldman Sachs International Lavinia Forcellese +44(20)7774-9243 | lavinia.forcellese@gs.com Goldman Sachs International Daan Struyven +1(212)357-4172 | daan.struyven@gs.com Goldman Sachs & Co. LLC Samantha Dart +1(212)357-9428 | samantha ...

Summary of Key Points from Conference Call Records Company and Industry Overview - **Company**: Freeport-McMoRan and Vale S.A. (淡水河谷) - **Industry**: Copper and Iron Ore Mining Core Insights and Arguments Freeport-McMoRan (Grasberg Mine Incident) - The Grasberg mine incident resulted in a production halt, with an expected copper output reduction of over 200,000 tons in 2025 and nearly 300,000 tons in 2026. Even after full recovery in 2027, there will still be a reduction of at least 100,000 tons [1][4][5] - The incident revealed potential technical or design flaws in underground mining, with repair costs estimated to exceed $1 billion. This, combined with a copper concentrate export ban and uncertainties in contract negotiations, poses multiple challenges for the company [1][5][10] - The Grasberg mine, being the second-largest copper mine globally, contributes significantly to Freeport's production, accounting for over 40% of its copper output in 2025 [4][5] - The copper price is expected to remain strong due to global supply tightness exacerbated by the incident, with LME copper prices hovering between $9,000 and $10,000 [6][10] Vale S.A. (Iron Ore Projects) - Vale's Caparema project has restarted, adding 15 million tons of iron ore capacity annually, with production costs below $20 per ton, enhancing the company's profitability [1][11] - The company has received operational permits for the Ceris expansion project, which will double copper production by 2035, indicating a significant business transformation and valuation enhancement [1][13] - Vale has launched a new iron ore product with 63% iron content, improving product flexibility and benefiting from reduced pricing impacts due to silica impurities [1][14] Financial Guidance and Shareholder Returns - Vale has lowered its 2025 capital expenditure guidance to $5.4-$5.7 billion, driven by strong free cash flow and a focus on shareholder returns, including potential stock buybacks or special dividends if net debt falls below $10 billion [2][17] Market Dynamics and Future Outlook - The copper mining industry faces increasing operational risks and challenges due to the rising proportion of underground mining, which is inherently riskier than open-pit mining [7][8] - The iron ore market remains robust, with strong demand from domestic steel mills despite production cut announcements, and the potential for price stability above $90 per ton through 2026 [16] Other Important Insights - The Grasberg incident has raised concerns about the relationship between Freeport and the Indonesian government, particularly regarding the renewal of operational contracts and export permits [9][10] - The ongoing challenges in the copper market, including the impact of recent mining accidents, highlight the need for companies to adapt to a changing operational landscape [6][7][10]

中信证券认为，近三年国内铜矿板块PE长期运行在10—15x，今年以来板块持续提升估值，与供给增速 下滑、国内需求强劲有密切关系。展望后市，国内铜矿板块在盈利和估值两方面将迎来持续共振：1） 年内供需进一步改善为盾，旺季效应和宏观暖风为矛，2025年三季度至四季度铜价有望冲击10500美元/ 吨，预计铜价中枢上移将促进企业盈利预期改善；2）对供给短缺与需求成长的感知差异导致海内外板 块估值悬殊，预计未来供需认知改善以及铜价上台阶将驱动国内估值继续提升至15—20x。 华鑫证券认为，铜矿再现扰动，需求旺季还未启动。此前，9月8日因事故停产的印尼Grasberg矿山本周 仍处于暂停状态，铜矿供应紧张的担忧仍然持续。需求方面，虽然电线电缆开工率环比再度走弱，但是 精炼铜制杆开工率环比升约3个百分点，需求相对平稳。目前铜需求旺季未启动，但是供应扰动再起， 预计铜价将走强。 印尼格拉斯伯格矿区运营方、美国矿业巨头自由港-麦克莫兰铜金公司正式宣布，因山体滑坡导致矿 难，该矿区遭遇"不可抗力"，预计今年第三季度铜销售额将因此下滑，全面复工时间推迟至2026年上半 年。受一系列消息影响，自由港-麦克莫兰铜金公司股价24日收盘大 ...

Core Viewpoint - The recent landslide incident at Freeport McMoRan's Grasberg mine in Indonesia has led to a significant disruption in copper supply, causing a sharp increase in copper prices globally [2][3][4]. Group 1: Incident Details - The Grasberg mine, one of the largest copper mines in the world, experienced a major landslide on September 8, resulting in the entrapment of seven workers and the subsequent suspension of operations [2]. - As of September 24, two of the trapped workers have been confirmed dead, while efforts continue to rescue the remaining five [2]. - The Grasberg mine was transitioning from open-pit to underground mining and had recently ramped up production capacity before the incident [2]. Group 2: Production and Supply Impact - Freeport McMoRan has officially lowered its production guidance, indicating that it will not meet its original sales target of 445 million pounds (approximately 200,000 tons) of copper for Q4 this year [3]. - The company has reduced its 2026 production target from 1.7 billion pounds to 1.1 billion pounds, a 35% decrease, and expects the mine's actual output this year to be around 500,000 tons [3]. - The incident is expected to exacerbate the existing tight supply conditions in the copper market, with potential supply shortages projected to increase over the next two years [3][4]. Group 3: Broader Market Implications - The copper industry has seen an increase in supply disruptions globally, with other mines also facing operational challenges, leading to a potential decline in copper concentrate supply by over 5% this year [4]. - Analysts predict that the International Copper Study Group (ICSG) may revise its copper concentrate production forecasts downward due to the recent incidents [4]. - The supply-demand balance for copper is expected to shift towards a tighter market, particularly with the ongoing issues at the Grasberg mine and other global supply challenges [5][6].

Cryptocurrency Market - Ethereum's price dropped significantly, falling below the psychological threshold of $4000, with a daily decline of 6.25% to $3898, marking a seven-week low [1] - Bitcoin also experienced a decline, dropping 3.25% and falling below the $110,000 key support level [1] - Solana saw a 7.8% decrease, marking its sixth consecutive day of decline [1] - Institutional fund inflows into Ethereum have cooled, contributing to the price drop, as indicated by cryptocurrency analyst Rachael Lucas [3] Ethereum ETF Withdrawals - Investors have withdrawn nearly $300 million from U.S.-listed Ethereum ETFs since the beginning of the week, coinciding with a significant market downturn [4] - The total net inflow for Ethereum ETFs in September is only $11 million, a stark contrast to over $3.8 billion in inflows in August [4] Copper Market - Freeport McMoRan announced a production halt at its Grasberg mine in Indonesia due to a landslide, triggering a force majeure on supply contracts [8] - The Grasberg mine is the second-largest copper mine globally, with an expected production of 816,500 tons in 2024, accounting for approximately 3.5% of global output [8] - Following the incident, Freeport has lowered its production guidance, indicating it will not meet its original sales target of 445 million pounds (approximately 200,000 tons) for Q4 [9] - The copper market is facing a tightening supply situation, exacerbated by the Grasberg mine's production halt and other recent supply disruptions [10] Future Outlook for Copper - Analysts predict that the copper market may shift towards a tight balance in Q4 due to supply constraints from the Grasberg mine and other factors [11] - The potential for increased demand from sectors such as data centers and renewable energy could lead to a significant rise in copper prices if supply remains constrained [11]

Core Viewpoint - The sudden surge in international copper prices, driven by the unexpected production halt at Freeport-McMoRan's Grasberg copper mine due to a significant landslide, has intensified concerns over future copper supply shortages and led to volatility in the futures and securities markets [1][4]. Group 1: Copper Market Impact - On September 24, LME copper prices rose sharply, returning to the $10,000 per ton level, following the announcement of the Grasberg mine's production issues [1][6]. - Grasberg is the world's second-largest copper mine, with a projected 2024 output of 816,000 tons, accounting for approximately 3.6% of global copper production [1][4]. - Freeport-McMoRan anticipates a 35% reduction in Grasberg's output for 2026 compared to previous estimates, with recovery expected only by 2027 [1][4]. Group 2: Stock Market Reactions - Freeport-McMoRan's stock plummeted nearly 17% on September 24, resulting in a market capitalization loss of $11 billion [2][7]. - Conversely, other copper producers like Southern Copper and Zijin Mining saw significant stock price increases, benefiting from the rising copper prices [2][8]. - As of September 25, Zijin Mining's market capitalization reached $100 billion [3]. Group 3: Supply Chain Concerns - The Grasberg incident, which occurred on September 8, did not initially impact copper prices until Freeport updated its production forecasts on September 24 [4]. - The anticipated production delays could shift the global copper market from a state of supply-demand balance to a supply shortage by 2026 [4][5]. - UBS forecasts a shift from a slight surplus in 2025 to a significant deficit of 421,000 tons in refined copper in 2026 due to the Grasberg production halt [5]. Group 4: Broader Market Trends - The copper market has faced multiple supply disruptions this year, including strikes in Chile and seismic events affecting other major mines [6][5]. - The recent price surge has attracted increased trading activity in related stocks, with Zijin Mining's trading volume reaching a record high of 10.7 billion yuan on September 25 [11]. - Despite the stock price increases, the overall valuation of Chinese copper companies remains lower than that of their international counterparts, such as Southern Copper [12][13].

Core Viewpoint - The company focuses on global copper and zinc mining, excelling in overseas acquisitions and operations, with successful international cases expected to replicate. The main profit currently comes from copper mining, and with the Federal Reserve entering a rate-cutting cycle, the demand for copper driven by energy transition is expected to push copper prices upward. The company's three main mines are on a fast development track, with Las Bambas improving community relations and achieving production increases and cost reductions. The Kinsevere project is progressing well, and the Khoemacau expansion plan has been initiated with experienced local partners [1]. Company Overview - The company is an international mining firm specializing in copper and zinc extraction, serving as the primary overseas resource operation platform for China Minmetals Corporation. Since its transformation in 2010, the company has steadily grown through overseas mergers and acquisitions, successfully acquiring multiple mines such as OZ, Kinsevere, Las Bambas, and Khoemacau, all of which have become profitable. The successful international operations are expected to continue, positioning the company as a leading global resource firm [1]. Mining Overview - **Las Bambas Mine (Peru)**: The copper grade increased from 0.5%-0.6% to 0.9% with the successful production of the second pit, Chalcobamba. Copper sales rose from 126,000 tons to 190,000 tons, and C1 costs decreased from $1.81 per pound to $1.06 per pound, leading to significant profit growth [2]. - **Kinsevere Mine (Democratic Republic of Congo)**: The mine has excellent resource endowment, allowing for open-pit mining without blasting, with an average grade of 2%. The transition from oxide to sulfide ore is partially complete, but domestic power shortages in the DRC have affected production. Once fully operational, the project will have a capacity of 130,000 tons, with a significant reduction in C1 costs expected [2]. - **Khoemacau Mine (Botswana)**: Current capacity is around 60,000 tons, with plans to reach 80,000 tons by 2028 and a long-term target of 200,000 tons. The company began collaborating with Jincheng Mining, which has extensive overseas mining experience, enhancing the certainty of the Khoemacau expansion [2]. Performance Forecast and Investment Recommendations - Based on the construction progress of the mines, copper sales are projected to be 520,000 tons, 535,000 tons, and 541,000 tons for 2025-2027, with corresponding equity amounts of 346,000 tons, 360,000 tons, and 364,000 tons. Assuming copper prices of $9,500 per ton, $10,000 per ton, and $10,500 per ton for 2025-2027, the company's net profit attributable to shareholders is expected to be $719 million, $782 million, and $859 million, respectively. The profit increase is mainly driven by rising copper prices, declining financial costs, and slight increases in production and sales [2]. Valuation - At an exchange rate of 7.78 HKD/USD, the company's profits for 2025-2027 are projected to be HKD 5.6 billion, HKD 6.08 billion, and HKD 6.68 billion, with corresponding P/E ratios of 12.1x, 11.1x, and 10.1x. Given the expected price increases for copper, the reasonable valuation for resource stocks is around 15-20x, indicating that the company's value is significantly undervalued, warranting an "overweight" rating [3].

Core Viewpoint - The significant rise in international copper prices, attributed to the unexpected production halt at Freeport-McMoRan's Grasberg copper mine due to a major landslide, has intensified supply concerns in an already tight copper market [1][4][6]. Supply Chain Disruptions - The Grasberg mine, the second-largest copper mine globally, is expected to see a 35% reduction in its 2026 production forecast, with a return to pre-incident levels not anticipated until 2027 [1][6]. - The incident has exacerbated existing supply-demand tensions in the copper market, with forecasts indicating a potential shift from a balanced supply-demand scenario to a supply deficit in 2026 [6][10]. Market Reactions - Following the news of the Grasberg incident, Freeport-McMoRan's stock plummeted nearly 17%, resulting in a market capitalization loss of approximately $11 billion (about 78.41 billion RMB) [1][10]. - In contrast, other copper producers like Southern Copper and Zijin Mining have seen their stock prices rise significantly, benefiting from the increased copper prices and market speculation [10][12]. Price Movements - The LME copper price surged by 3.46% on the day of the incident's disclosure, reaching a high of $10,000 per ton, marking the highest level since May 2024 [8][10]. - Domestic copper futures and electrolytic copper prices also rose by over 3%, nearing 82,000 RMB per ton [8][14]. Performance of Copper Companies - Zijin Mining's market capitalization has surpassed $100 billion, reflecting strong performance amid rising copper prices [2]. - Companies like Zijin Mining and Luoyang Molybdenum have reported over 50% growth in net profit year-on-year, indicating robust financial health and potential for further profit increases [12][14]. Valuation Comparisons - Despite the strong performance of A-share copper companies, their valuation levels remain lower compared to international peers like Southern Copper, with Zijin Mining and Luoyang Molybdenum trading at price-to-earnings ratios of approximately 15 and 17, respectively [15].

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints of the Report - The mudslide accident at the GBC mine in the Grasberg copper mine in Indonesia has a significant impact on global copper supply, and the impact on the copper industry chain has just begun [7] Group 3: Summary by Directory 1. Event Review and Background - On September 8, a mudslide occurred at the GBC mine in the Grasberg copper mine in Indonesia, causing 2 deaths and 5 missing, and the mine has been shut down since the accident [1] - The Grasberg copper mine in Indonesia is the world's third - largest copper mine, with a copper production of 816,500 metric tons in 2024, accounting for 3.55% of the global copper production of 23 million tons [1] - In 2024, the daily output of copper concentrate at the Grasberg mine was 208,365 tons, with the GBC mine accounting for 64% (about 133,800 tons), the DMLZ mine accounting for 32% (about 64,900 tons), and the Big Gossan mine accounting for 4% (about 8,000 tons) [1] - The Grasberg copper mine is an important asset of Freeport - McMoRan, an international mining company. The Indonesian subsidiary PT Freeport Indonesia holds 48.76% of the Grasberg underground mine, and the rest is held by Indonesian state - owned enterprises [2][3] 2. Production Impact Analysis - After the accident on September 8, all mining operations in the Grasberg mine in Indonesia stopped. The investigation is expected to be completed by the end of 2025 [4] - The impact on Freeport Indonesia's third - quarter sales is not significant. After the accident, the estimated third - quarter copper sales decreased by about 4% compared to July, but it is still estimated to be 433,592 tons due to inventory [4] - The DMLZ and Big Gossan mines are expected to restart in mid - fourth quarter of 2025 (November). The GBC mine will start phased restart and capacity increase in the first half of 2026 [5] - Freeport Indonesia's copper sales in the fourth quarter of 2025 will be negligible, estimated at 20,184 metric tons [5] - The GBC mine's PB2 and PB3 production blocks will restart and increase production in the first half of 2026, PB1S of PB1C will start in the second half of 2026, and the rest of PB1C will restart in 2027 [5] - In the phased restart scenario, the estimated copper production in 2026 is 501,220 tons, which is 61.3% of the 2024 production [6] 3. Market Outlook - After Freeport announced force majeure at the Grasberg copper mine in Indonesia, copper prices on the LME and SHFE rose significantly. The impact of this accident on the global copper supply will be large and long - lasting [7]