(Adds quotes from adviser, background)

ABOARD AIR FORCE TWO, April 21 (Reuters) - U.S. Vice President Mike Pence told Indonesian President Joko Widodo that more steps were needed to resolve the dispute between mining company Freeport McMoRan Inc and the Indonesian government, a White House foreign policy adviser said on Friday.

Amid rising tensions around the world's second-biggest copper mine, Pence briefly raised the issue during a meeting in Jakarta on Thursday at the presidential palace.

Pence thanked Widodo for an interim fix for the dispute over his government's changes to mining rules that had prompted Freeport to slash output at its Grasberg copper mine.

"We don’t want to get too deep in business-to-business issues, but when it comes to economic development and reforms and regulations in Indonesia, we encouraged it," the adviser told reporters traveling with Pence on his 10-day trip to Asia.

"We told them that there were more steps that needed to be taken,” the adviser said, noting it was the only business issue that Pence raised in his Thursday meeting with Widodo.

"It wasn’t a deep conversation; it was a few minutes," the adviser said. "We raised it in the context of thanking them for their initial interim resolution this week."

Freeport warned on Friday that it would punish workers for absenteeism at its Indonesian unit, the day after one of its main unions announced plans to go on a one-month strike over employment conditions.

Pence landed in Sydney, Australia, on Friday, the fourth stop on a tour that has included meetings in Seoul, Tokyo and Jakarta with U.S. corporations about trade and investment issues.

Pence is slated to meet Australian Prime Minister Malcolm Turnbull on Saturday and later will meet with business leaders. (Reporting by Roberta Rampton; Editing by Doina Chiacu, Chizu Nomiyama and Lisa Von Ahn)