The panel, led by opposition leader Aung San Suu Kyi, said protesters suffered "unnecessary burns".
Police had said they only used tear gas and water cannon against protesters, many of them monks, at the November incident.
The report recommended work on the mine continue, however, despite opposition.
A separate report last month by Burmese lawyers and the US-based Justice Trust accused police of using military-issue white phosphorus grenades to disperse protesters.
This report, ordered by President Thein Sein, did not specifically mention white phosphorus. But it said the devices used on protesters contained phosphorus, which "can cause fire when they explode".
"We have found that unexpected and unnecessary burns were caused to some monks and civilians because the police used smoke bombs without knowing what their effect would be," the report said.
The protests were a result of a "lack of transparency", it said, and that compensation offered people "was not at market value".
"This massive project is beneficial to the country even though the benefit is slight," the report said.
The conclusion of the report, released late on Monday, drew an angry reaction from protesters. Thwe Thwe Win, a protest leader, said demonstrations would resume.
"I am very dissatisfied and it is unacceptable,'' she told Associated Press news agency.
"There is no clause that will punish anyone who had ordered the violent crackdown. Action should be taken against the person who gave the order."
The mine at Monywa in Burma's north-west is jointly owned by a Chinese company and Myanmar Economic Holdings, owned by the Burmese military.
Hundreds of local villagers, supported by activists and Buddhist monks, took part in months of sit-in protests, saying they had been unfairly forced to give up their land.
Dozens of people suffered injuries, including burns, when police moved in to end the protest on 29 November.
The government later apologised to the injured and set up an investigation commission led by Ms Suu Kyi.
She is expected to travel to the mine to talk with villagers on Wednesday.-British Broadcasting Corporation (March 12, 2013)
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