A second employee of US mining giant Freeport McMoRan was shot dead Sunday in Indonesia, a day after an Australian worker was killed by men using military-issue weapons in a planned ambush, reports said.

The latest victim, Markus Rattealo, a security guard for the Freeport's Indonesian subsidiary, was shot while he was travelling in a car in the restive Papua province, The Jakarta Post newspaper reported.

"After the incident, our anti-terror (police) team had a gun battle with the unknown gunmen," National Police spokesman Sulistyo Ishak was quoted by Antara news agency as saying.

On Saturday, Drew Nicholas Grant, 38, a Freeport technician, was shot dead as he travelled in a car with three others between Tembagapura and Timika, also in Papua, provincial police chief Bagus Ekodanto said.

The attack occurred in Freeport's vast concession area, which includes the massive Grasberg gold and copper mine.

"The shooting was pre-planned. (It's) clear they (the attackers) were using weapons belonging to the police or the military," he added.

"Three bullet casings and a packet of rice were found on site. It seemed like they (the attackers) had been waiting for him and his friends to arrive," Ekodanto said.

Ekodanto said Grant was shot five times in the neck, chest and stomach from 25 metres.

"We're still investigating the case. We don't want to be hasty and say they are from separatist groups," he added.

Grant's body is undergoing a post-mortem examination in Jakarta and is expected to to be flown to Australia today, TVOne reported.

A 40-member team of the police's elite Mobile Brigade (Brimob), anti-terror squad and forensic experts have been deployed to beef up security in the area and "ensure that the mining operation is not disrupted", Ekodanto said.

Two American teachers and an Indonesian colleague who worked at the Grasberg mine were shot dead in an ambush near the site in 2002.

US and Indonesian investigators found that Papuan separatist rebels were behind that attack but local rights groups have long maintained the military had a hand in the killings.

Freeport Indonesia is the largest single taxpayer to the Indonesian government.

Grasberg sits on the world's largest gold and copper reserves on the far eastern extreme of the Indonesian archipelago.

Pro-independence militants have waged a long-running insurgency against Indonesian rule in Papua, which is off-limits to foreign journalists without special permission.

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