Indonesian police say he was killed by a single bullet fired by unknown attackers - possibly a sniper.
Drew Grant was soon to be reunited with his wife and their daughter, who were shortly returning to Papua to live with him on-site at the giant Grasberg gold and copper mine which is owned by a subsidiary of the United States company Freeport McMoran.
But in the early hours of the morning, when he was on his way to a golf game with friends, a bullet apparently fired from the surrounding hills struck him in the neck and killed him.
Freeport Indonesia says that it is fully co-operating with police on the investigation and deeply regrets the loss of an employee.
Papua's police chief says Mr Grant's body is being sent to Jakarta for examination.
Freeport Indonesia (PT-FI) spokesman Mindo Pangaribuan said the workers were travelling in a vehicle on a road outside the company's mining and operations areas when they were attacked.
"Shots were fired at a PT-FI vehicle, fatally wounding an employee who was a passenger in the vehicle," he said in a statement.
"Other passengers were not injured."
'Sniper' attack
Indonesian national police inspector-general Nanan Sukarna said Mr Grant was one of five people in the car at the time.
"Most likely it [the attack] was carried out by a sniper," he said, noting the other passengers were unhurt.
Mr Sukarna said provincial and district police were investigating and four detectives from Jakarta had been deployed as backup.
Freeport's Mr Pangaribuan said police and officers from Indonesia's anti-terrorism squad Detachment 88 were at the scene and had provided additional security in the area, adding there had been no further incidents.
"PT-FI is cooperating fully with the police investigation and deeply regrets the loss of an employee," he said.
DFAT says it is in contact with the man's family and employer.
"Consular staff from the Australian Embassy in Jakarta remain in close contact with the man's employer and local police," a departmental spokesman said in a statement.
"Police have advised they are investigating the man's murder."
Channel Ten reported that Mr Grant was married and had a nine-week-old daughter.
"Obviously it is a bit painful," his brother Nicholas Grant told Ten.
"We're just in shock at the moment."
In 2002 three teachers, including two Americans, were killed in a shooting attack blamed on Papuan separatists by Indonesian and American investigators.
- ABC/AAP