Colombia Sees Protests as Commodities Wealth Spurs ‘Discontent’. -Bloomberg-

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Colombia should brace for more protests against commodities producers amid “discontent” over their failure to share the benefits of the nation’s natural- resources wealth, Vice President Angelino Garzon said.

A lack of local hiring and failures to improve regional infrastructure and protect the environment is fueling criticism against oil and mining companies from unions, residents and local officials, Garzon said in an interview.

“There is a lot of criticism both from citizens and also from workers,” he said Sept. 10. “People expect that when a lot of wealth is leaving their region, there also is improvement in their own prosperity.”

Protests have cut crude and copper production in Latin America this year by companies including BHP Billiton Ltd. (BHP) and YPF SA as rising prices prompt demands for a greater share of nations’ commodities wealth. Colombia is South America’s third- largest oil producer and the region’s largest coal exporter.

In Colombia, protesters blocking roads caused output cuts this year at oil producers Petrominerales Ltd. (PMG) and Pacific Rubiales Energy Corp. (PRE) Rallies against a development near a watershed area prompted Eco Oro Minerales Corp., formerly Greystar Resources Ltd., to redesign its project.

Gold has jumped 45 percent in 12 months, while copper has climbed 17 percent and oil has risen 6 percent in the same period. Rising crude prices and production increases more than doubled net income at state-run oil producer Ecopetrol SA (ECOPETL) to 3.75 trillion pesos ($2.1 billion) in the second quarter.

Better Security

To increase investment in oil wells and mines, President Juan Manuel Santos has lured international companies to Colombia by improving security. The government seeks higher metals and oil production while striking a balance with economic and social development, Garzon said.

Some foreign companies investing in Colombia have abandoned the social, labor and environmental “good practices” they follow in their home countries, he said.

“Here they do just the opposite,” he said. “Companies have to revise their practices.”

He said companies with “very good practices” include Ecopetrol and Cerrejon, Colombia’s largest coal mine owned by BHP Billiton, Anglo American Plc (AAL) and Xstrata Plc. (XTA)

Unions in Peru, Chile and Argentina also have walked off the job to demand greater benefits this year. In Peru, a union at a unit of Freeport-McMoRan Copper & Gold Inc. (FCX) said it will resume government-brokered labor talks today in a bid to avert a strike to demand higher wages.

Lost Output

In Chile, producers may have lost 8 percent of estimated 2011 output on strikes, bad weather and declining ore quality, Diego Hernandez, chief executive officer of state-owned copper producer Codelco, said Aug. 12. Chile is the world’s largest producer, followed by Peru.

Students in Chile also have staged months of protests, prompting President Sebastian Pinera to announce the creation of a $4 billion education fund after the nation’s revenue from copper surged.

In Argentina, protesters have cut output at oil fields owned by YPF and taken over facilities run by Petrobras Argentina SA.

Bloomberg.