The currently location I am considering is a few minutes walk from the mine, which will have its own compound. This is mostly because it allows for better expansion/design freedom.
However, I'm thinking mine/metal access could be something people get in exchange for a tax on the metal they mine, that way the city finances are sustained. The city then pays in coins/bars for the non-metal produce it needs, providing for a filtering of metal into the rest of the city economy.
Regarding the economics of getting the walls up, I think its not as difficult as might be thought. Mostly because 1) we get everybody to pitch in a bit for the sake of the city (most people are happy to do this, at least until the economy gets on its feet) and 2) palisades are quite effective and cheap, and layers of walls should do quite well. We could have the innermost area brick as a bolt-hole, and otherwise leave individual plot defense up to the individual.
Hmmm, could we combine circular with quadrant modular design? I.E. Make as things expand out a bit, make quadrants of a circle, i.e. one quarter of a circle, with its own wall.
This is hastily done but...

If things got even bigger you could go into eights...
The great thing about modularity of 'districts' is when economy is up and going, and you start to work on politics/state finance/defense you have a basic political unit ready to draw upon. I.E. have a person assigned as warden of each district, who holds the keys for that district, and is responsible for wall repair etc. (in exchange for pay?)