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UPDATE 2-Australian shot dead near Freeport Papua mine

(Adds Australian official, paragraph 6)

JAKARTA, July 11 (Reuters) - An Australian worker has been shot dead near the massive Grasberg mine in Indonesia's Papua province run by a unit of Freeport McMoran Copper & Gold Inc FCX.N, Papua's police chief said on Saturday.

“An Australian working for Freeport got shot at 5.30 this morning,” police chief Bagus Ekodanto said by telephone, adding the shooting happened between Tembagapura and Timika.

A spokesman for PT Freeport Indonesia confirmed a company worker had been shot dead. He said the attack took place outside the mining area and operations were not affected.

“We confirm there was a shooting around mile-post 52 to 53 of a Freeport vehicle where one passenger who sat in the back was shot dead,” said Freeport spokesman Mindo Pangaribuan.

He said it was unclear who was behind the attack and police were investigating.

A spokesman for the Australian Department of Foreign Affairs and Trade said the dead man was 29 years old and a technical expert from the state of Victoria.

Timika police chief Godhelp C. Mansnembra said three people were wounded in the shooting and were being treated at a local hospital. But Freeport Indonesia said in a statement that the other passengers were unharmed.

Police and Indonesia’s anti-terrorism unit, Detachment 88, tightened security in the area after the shooting, the company said.

The mine has been a frequent source of controversy over its environmental impact, the share of revenue going to Papuans and the legality of payments to Indonesian security forces who help guard the site.

In 2002, two American teachers and their Indonesian companion were killed in an ambush outside the Freeport installation.

There was an arson attack near the mine earlier this week when a bus and a security post were set on fire in what police said was an attempt to block a road leading to the mine.

Papua has suffered a low-level separatist insurgency for decades.

Indonesia’s human rights record has also been hurt by persistent allegations of abuses by the military in Papua.

The Grasberg mine has the world’s largest recoverable reserves of copper and the largest gold reserves. It accounts for nearly 40 percent of Freeport’s total copper reserves of 93 billion pounds, according to Freeport’s website. (Reporting by Olivia Rondonuwu, Karima Anjani and Sunanda Creagh in Jakarta, Oka Barta Daud in Jayapura and John Pakage in Nabire; writing by Ed Davies; editing by Tim Pearce)

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