(Insider Stories) - US's Freeport McMoRan Copper & Gold has agree on several terms of renegotiaion contract of work with Indonesia goverment, said the chief executive.

Freeport's agree to divest 25% in Indonesian subsidiary including offer above 10% to governemt and a five percent stake to the public. Now Indonesia has 9.36% shares in PT Freeport Indonesia.

They also agree to build copper smelter and is in talks with three local smelters and release 30% of their consession now totally 212,000 hectares to Indonesia government.

Rozik Soetjipto, CEO at Freeport Indonesia said, Freeport has signed an agreement with three local smelter PT Nusantra Smelting, PT Indo Smelting and PT Indovassi to make a feasibility study to build copper smelter in Papua.

Freeport's current contract to operate Grasberg in Papua province, the world's second biggest copper mine, expires in 2021. The Arizon-based company wants a new contract completed before it makes investments of around $15 billion to extend the life of the complex after open-pit mining ends.

The government has asked all miners to submit plans to build refineries or smelters ahead of a January 2014 ban on raw mineral exports, while foreign miners must sell 51 percent of their assets after 10 years of production.

Freeport Indonesia only resumed full operations two weeks ago after suspending operations when 28 people died following a training tunnel cave-in in May.

The open-pit mine normally produces between 140,000 tonnes and 150,000 tonnes of ore per day, while output from the underground operations is 80,000 tonnes.

The Grasberg mine ships around 35 percent of its production for further processing in Indonesia, and the remainder goes to Japan, Korea, China and Spain, say government officials.

The government hopes to conclude the contract talks by the end of year. Indonesian's Trade Minister has said May's accident should not delay a deal being reached.

As well as talks with the government to renegotiate a new mining contract to replace its current 30-year contract that expires in 2021, Freeport Indonesia is also in pay talks with workers unions.