Ecuador says to introduce mining bill this week

QUITO, Nov 10 (Reuters) - Ecuadorean President Rafael Correa said he will introduce this week a new mining law key for the nascent sector, and warned his allies in the legislature not to make deep changes to the bill.

Correa, a leftist former economy minister, has said he wants to jump-start mining of precious metals to diversify the oil-dependent economy and share its revenues with the poor.

"If there are deep changes to the law I will veto it and put it up for a popular referendum," Correa said during his weekly media address on Saturday. "The government's political decision is to develop the mining sector."

Correa, who enjoys a majority in the legislature, has clashed with more radical factions inside his "Alianza Pais" party that say large-scale mining will hurt the country's pristine environment and indigenous communities in the jungle.

The new mining law is key for foreign miners who have found massive gold and copper deposits in southern Ecuador. If approved the law will lift a government ban on mining activity approved in April that hurt the stock price of Canadian miners such as Corriente Resources (CTQ.TO) and Iamgold (IMG.TO).

The new bill will set royalties and tougher environmental controls over miners, government officials said. The new law is expected to be approved late this year or in early 2009.

Correa also warned environmentalists and Indian groups who have threatened with road blockades and massive protests to reject the new bill.

"These groups can do whatever they want peacefully, but if they block roads and attempt against private property we will act firmly," Correa said. "It will be irresponsible to sit on these world-class gold, copper and silver reserves and leave it underground."

Influential Indian groups have threatened with massive marches to reject the new law they say it benefits foreign companies to the detriment of the environment. (Reporting by Alonso Soto; Editing by John Picinich)