The woman, believed to be in her 50s, was gunned down yesterday when police opened fire as local protesters tried to stop workers from erecting fences near Letpadaung mine in the northwestern town of Monywa.
"We see it as a sad moment because a woman died during this conflict," information minister Ye Htut told AFP.
He said police had opened fire but did not immediately confirm that their bullets killed the woman.
"We will review how the police handled (the clash)," Ye Htut said.
State media reported yesterday that nine protesters and 11 police officers had also been injured during the protest.
The mine has triggered fierce opposition from local villagers due to alleged land grabs and environmental damage. It has raised questions about Myanmar's reliance on investment from neighbouring China - which gave crucial political support to the former junta.
China's Wanbao, which runs the project as part of a joint venture with a major Myanmar military conglomerate, said the woman's "senseless death" was "painful and poignant".
Wanbao said it had completed two major consultations this year in a process of "reconciliation" with local people.
In November 2012 a botched police raid using phosphorus on a protest at the mine left dozens of people, including monks, with burn injuries.
That crackdown, the harshest since the end of outright army rule in 2011, sparked fury in the Buddhist-majority country.
Earlier this year two Chinese workers were kidnapped at the site by activists, though they were later released unharmed.
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