QUITO (Reuters) - Police protesters attackedEcuadorean President Rafael Correa over austerity measuresThursday, leaving the leftist leader holed up in a hospital andplunging the OPEC nation into political chaos.

The unrest was sparked by dissident police protesting overa government proposal to cut their bonuses.

The U.S.-trained economist's aggressive drive to tightenthe state's grip on oil and mining revenue has hurt investmentin the South American nation since he took office in 2007.

Ecuador is one of the continent's largest oil producers,but among the smallest in the oil producers' cartel, with dailyproduction of around 470,000 barrels of crude.

Foreign mining companies have found world-class copper,silver and gold deposits in the Andean nation, but delays withenvironmental permits and a government-ordered freeze onoperations two years ago has hit projects and stock prices.

Below are some questions and answers about the country'soil and mining sectors amid the political upheaval.


Oil operations in the remote Amazon region are unlikely tobe immediately affected by the protests, which are centered inthe capital Quito and other major cities.

The oil industry was spared from previous politicalupheavals that led to the toppling of three presidents duringthe decade before Correa took office.

Violent protests by Amazon residents demanding a biggershare of the oil wealth in 2006 was the last major blow to thesector, crippling production and halting exports. Correasucceeded in halting sporadic protests by poor communities inthe country's oil heartland by boosting security.

One risk to the industry would be if demonstrations spreadto include troops who guard state and private oilfields.

Industry sources and former oil officials see a lowprobability that workers in the state oil company Petroecuadorwould join protests, even after they clashed with Correa overmassive lay-offs and cuts to their benefits.

Correa's political rival Lucio Gutierrez, himself toppledby massive street protests in 2005, has strong support in theAmazon region, but analysts don't expect him to rallysupporters to hit oil operations.


The country's oil quota is unlikely to be affected by thedemonstration if production areas remain calm.

Local critics say Ecuador is already exporting more thanits quota to reap the benefits of a recovery in global oilprices. Still, the country's production is only a tiny part ofOPEC's overall output.


The protests are not seen having an immediate impact in thegrowing mining sector, which still only has marginal productionas most foreign companies working in Ecuador are still provingtheir copper, silver and gold deposits.

Protests could hurt investor sentiment in the sector,though, which is still reeling from a mining ban ordered byCorrea allies that lasted for more than a year beginning in2008. It could also delay the permits companies need to developprojects, which include some of the world's top untapped golddeposits, mining consultants and industry executives said.

Kinross Gold and IamGold are some of themain miners exploring in Ecuador. Their shares are unlikely tosuffer from the upheaval as operations in the country remainsmall when compared with their holdings worldwide.


Both oil and mining investment could dwindle further due tothe instability, which may stunt output in coming years.

Crude output has fallen around 9 percent since Correa tookoffice as oil companies reduce spending while they negotiatenew contracts with the government.

Correa's move to default on its foreign debt has alsoscared away investors, who are flocking to neighboring Peru andColombia amid a commodities boom. (Reporting by Alonso Soto in Santiago; Editing by DanielWallis and Eric Walsh)