Ecuador President Rafael Correa on Thursday said he will not back down from a recently approved law that encourages mining and has sparked protests by Indians and environmentalists.

The new law slaps royalties on mining companies and lifts a nine-month ban on exploration that hurt the stock price of companies operating in the Andean nation. Foreign mining companies have found massive gold, silver and copper deposits in southern Ecuador.

It is necessary to propel responsible mining, Correa said during his state of the state to the assembly. I will not back down on the mining law.

Correa has to ratify or make changes to the new mining law approved by the assembly earlier this week. The socialist had threatened to veto the law if lawmakers made deep changes to the legislation.

The law sets at least 5 percent royalties based on sales and boosts government controls over the nascent sector.

The law could spark new anti-mining protests by Indian groups and environmentalists who say the legislation favors foreign companies over poor communities and threatens the country's pristine environment. Sometimes violent protests have kept investors worried over the development of the sector.

Worldwide mining companies are slashing investment plans and selling assets to keep much-needed capital as international credit grows scarce and the price of industrial metals plummet on fears of global recession.

Miners including Corriente Resources and Kinross sit on multibillion dollar metal deposits, but analysts say the development of those projects could be delayed due to the global crisis.

(Reporting by Alonso Soto; Editing by David Gregorio)