JAKARTA, April 29 (Reuters) - Indonesia's investment

minister said on Monday that authorities should consider

allowing Freeport Indonesia to export copper concentrate beyond

May as its new smelter will not be able to immediately absorb

all of its output.

The resource-rich country banned exports of raw minerals

from June last year, but allowed Freeport to continue shipments

until the end of May while it finished construction of a $3

billion smelter in East Java with a 1.7 million metric ton

processing capacity.

Freeport, however, said that while the smelter is expected

to start operations in June, it will not reach full production

capacity until around the end of the year, leaving excess

concentrate output.

"If there is a potential to grant export permit for the

(volume) difference, I think it should be something that we must

consider and do," Investment Minister Bahlil Lahadalia told

reporters.

The company is in constant discussion with the government to

secure the export permits, a Freeport Indonesia spokesperson

said.

The authority to grant permits falls under mining ministry,

however it also considers input from other ministries.

The mining ministry declined to immediately comment on the

matter.

Freeport Indonesia's chief executive has previously said

that it may have to slash copper ore output by 40% this year if

the company is not allowed to export and that state revenue

could potentially drop by around $2 billion.

Meanwhile, Indonesia is negotiating to acquire an additional

10% stake in Freeport Indonesia, talks which Bahlil said are

"nearing the final stage".

(Reporting by Bernadette Christina Munthe; Writing by Fransiska

Nangoy; Editing by Kirsten Donovan

)