CORRECTED - Freeport-McMoRan talking to Papuans about mine stake

(Corrects subsidiary PT Freeport Indonesia in 4th paragraph)

* Freeport talking to Papua over stake sale

* Sees strategic benefits in more Indonesian control

* Tighter security introduced at Grasberg mine

NEW YORK, April 21 (Reuters) - Freeport-McMoRan Copper & Gold Inc (FCX.N) is talking to Indonesia's province of Papua about selling a stake in its Grasberg mine, Chief Executive Officer Richard Adkerson said on Wednesday.

"It could have some positive strategic benefits in terms of our relationship with the people there," he said of the vast gold mine that has been the site of sporadic violence in the past year in which three people were killed.

Rebels in the eastern province, who have waged a low-level insurgency against the government for four decades, threatened to blockade the Freeport mine after police killed a separatist in one attack last December.

Grasberg, the world's largest gold mine, has been operated by Freeport since 1973 through its subsidiary PT Freeport Indonesia. The company owns 90.64 percent of the mine with the remaining 9.36 percent stake held by the Jakarta government.

During a conference call with Wall Street analysts to discuss Freeport's first-quarter financial results, Adkerson was asked if the company was considering selling a further 9.36 percent stake in Grasberg to the Jakarta government.

He said the government had considered buying it, but decided not to and suggested the company sell to other Indonesian investors.

"We have a contract of work which under its terms does not require us to divest any of our interest," Adkerson said. "The government has asked us to voluntarily consider offering or working to achieve that so they have a shared ownership.

"We are in discussions with the province of Papua," he said. "It is too early to say when or how it (a sale) would happen and we would have to determine it was not detrimental to Freeport shareholders."

Asked about reports of bomb-sniffing dogs being brought in by Freeport to protect the mine, Adkerson said they were part of new security procedures the company has adopted to protect workers after recent violence on roads leading to the mine.

"We had a shooting event in January and two in the last six months. We have adopted procedures for transporting people and equipment on the roads."

A company spokesman said three people have been killed around Grasberg since last July. The latest attack was on Jan. 24, when nine people were wounded, he said.

"We are not satisfied," said Adkerson. "We continue to encourage authorities to complete the investigation and bring the people doing these terrible things to justice."

(Reporting by Steve James; Editing by Richard Chang)