Jakarta will require multi-national miner, Freeport-McMoRan, to build two copper smelters in Indonesia, at a cost of nearly 4 billion US dollars by 2020.
Freeport operates a huge copper and gold mine in Papua province.
Reuters reports that talks between the miner and Jakarta over the firm's future in the country have resumed.
The proposal comes five months after Freeport signed a memorandum of understanding with the Indonesian government ending a six-month tax dispute and which paved the way for the company to resume copper concentrate exports.
As part of that MOU, Freeport agreed to pay a 115 million dollar "assurance bond" and to develop a 2 point 3 billion dollar smelter by 2017.
The government is now asking Freeport to build a second one by 2020 at a cost of about 1.5 billion.
The Coal and Minerals director, General Sukhyar, says the second smelter is proposed for Papua.
The first is to be built in Gresik on East Java.