Dozens of villagers and Buddhist monks were hurt by security forces during demonstrations, with protestors claiming the mine is causing environmental, social and health problems.
Now Ms Suu Kyi has been given the job of advising the government on whether the project, which is a joint venture between a Chinese firm and a company owned by Burma's military, should continue.
Presenter: Richard Ewart
Speaker: Dr Nicholas Farrelly, Burma specialist, Australian National University's College of Asia and the Pacific
FARRELLY: Certainly this appointment gives that commission the kind of credibility that it really needs. It's very unfortunate that Burma's current government headed by President Thein Sein, that they continue to be buffeted by these unfortunate incidents and this most recent one in the Sagaing region, in Upper Burma is just the sort of thing that he and his advisers can do without. They need to very quickly try and change the story here. They're hoping, I'm sure that Aung San Suu Kyi's presence in the discussions and negotiations, which are now going to occur will provide it exactly the sort of stature that's required. This is a messy, complicated situation. Aung San Suu Kyi herself has been very cautious in her initial public statements. That's a good sign though, that's a sign that perhaps this is the sort of situation that now can resolved without any further bloodshed.
EWART: Underpinning this though is the connection between the Chinese firm, and the military-owned firm in Burma being jointly involved in this project and if she comes back with a recommendation from her Committee that that arrangement should be terminated, that could have quite serious repercussions you would think?
FARRELLY: Yes, no doubt about it and this why her early statements at least have suggested that they're not looking to make life more difficult for Chinese commercial interests inside Burma. But there's every chance that the final recommendations of this Committee will be that this particular development should be, perhaps suspended or perhaps that it should proceed in some transformed and maybe lighter form. There are all sorts of issues like this that are going to play out in Burma over the years ahead. The days when Chinese commercial interests and their Burmese collaborators could get away with absolutely anything they want are now coming to an end. I think that's a very positive trend, the fact that Aung San Suu Kyi has put herself right at the heart of this particular set of negotiations is a good thing to see. It's going to be tricky though, because the last thing that Burma wants to do right about now is to alienate one of its most significant investors, one of the commercial partners that managed to keep the economy trundling along through all of these years when everything else has tended to stagnate.
EWART: I guess also the other thing to be considered in all this is that Aung San Suu Kyi for so long has been seen as the voice of the people and plainly if she doesn't pick up on what has stirred up these demonstrations in the first place and doesn't pick up on what local people think about this, she could create problems for herself from a different direction?
FARRELLY: You're quite right there Richard. This is an intriguing set of circumstances and it's one that is relatively new for Aung San Suu Kyi herself. She's managed now for more than two decades to be a symbol of righteousness and of political purity and now she needs to get down in the trenches. She needs to do the really hard work that's required of politicians in a system like Burma's and with that there'll be some tough calls along the way. She's likely to alienate some people. There will be some who will exasperated by the sorts of compromises that she suggests and as the world comes to terms with this, so will the Burmese people. They'll see Aung San Suu Kyi as a political operator and she's going to be having to work through these sorts of discussions in a way that is sensible and wise and that hopefully gives those many millions of people who've supported her over the decades some further reasons to have faith in her for the difficult times that are to come.
EWART: What do you think the establishment of this Commission says about the way the government is heading, because on the one hand, of course, we've had a pretty savage military crackdown, which has created this situation in the first place, perhaps the most serious since the move towards democracy began to gather moment. But on the other hand, I guess in past years they wouldn't have bothered to have a Commission of Inquiry, they wouldn't even have looked into at all?
FARRELLY: That's it. They certainly wouldn't have looked into these sorts of incidents and in the past, we've seen them, time and time again, very quickly swept under the rug and then largely forgotten, except for those in the exiled activist community who've done their best to try and continue drawing scrutiny towards these kinds of issues and outrages.
What we have though now is a very different set of circumstances. Burma is a much freer place than it was even two years ago and since the elections back in November, 2010, so much has changed.
With that though, we still get these kinds of contradictions. We can't pretend that the country is necessarily all sweetness and light at this stage.
One of perhaps the most intriguing elements to emerge since this most recent crackdown is that the head of the police force in that region of Upper Burma actually went to the town in question and offered his apologies to some of the senior monks. This is something that we really haven't seen before. It suggests that all of the incentives for somebody like a regional police chief are now towards trying to keep things calm and stable and secure and peaceful. This is no doubt about it a good sign, but the only reason that we can learn of such efforts to apologise is because, of course, there was this outrage in the first place.