By Fransiska Nangoy and Gibran Naiyyar Peshimam

JAKARTA, May 20 (Reuters) - The recovery process at PT Freeport Indonesia's Grasberg gold and copper mine is taking longer than expected, but the company expects operations to "approach" full capacity by end of 2027, its chief executive told Reuters on Wednesday.

Seven workers were killed in September last year when around 800,000 metric tons of wet material flooded the Grasberg Block Cave, part of the Grasberg complex, the world's second largest copper mine and its largest gold mine.

Production disruption from the mine had sent global copper prices up amid surging demand.

"We found out that the ore and the GBC, now, because of the incident, has more water... since the ore is going to be a lot wetter than what we thought, we have to modify the chute," Freeport Indonesia CEO Tony Wenas said in an interview at the company headquarters in Jakarta.

He said currently the complex, majority-owned by Indonesia's state holding and operated by U.S.-based Freeport-McMoRan FCX.N, is operating at 50% of normal capacity, which will be ramped up later this year to 65%.

"In the second half next year, we are approaching full ramp up," Wenas said, adding that 2027's copper cathode output was projected to be around 1.2 billion pounds and gold at 1 million ounces.

That is up from the 2026 projection of 800 million pounds of copper cathode and 700,000 ounces of gold.