The Indonesian government said it will guarantee supply of raw materials for investors building smelters to process copper, gold and silver concentrates in the country.

If necessary, U.S. PT Freeport Indonesia, the largest producer of copper concentrate in the country, will be asked to stop exports of the commodity, Mineral, Coal and Geothermal Director General Simon Felix Sembiring said.

The government will also guarantee captive market for the smelters, Simon said.

Freeport, which operates in Papua, will not be allowed to take part in the new project to build smelter, he said, adding, "If Freeport is allowed it will be the one to reap the profit again."

The country has a smelter processing copper concentrate namely PT Smelting, which 25 per cent owned by Freeport. It was built in 1996 at a cost of US$500 million.

Simon said with available basic material and guaranteed market, local companies should be serious in planning the project.

Freeport will have to terminate all of its contracts with buyers abroad.