BHP Billiton and Newcrest will be forced to renegotiate their long-standing mining leases under controversial new divestment laws in Indonesia.

A senior official in Indonesia's Department of Mines and Energy has confirmed that all companies without exception, must implement the new policy under which foreigners cannot own more than 49 per cent of a mining project in the country.

But the details of the divestment for projects operating under existing contracts are subject to negotiation.

The regulation, which was signed by the Indonesian President, Susilo Bambang Yudhoyono, last month but only published last week, has caused turmoil in the global mining industry as companies that have billions in assets try to work out what it means.

The divestment must start taking place after a mine has been in production for five years, and be complete after 10 years.