The world's second largest ferronickel operation, Cerro Matoso in Colombia, run by BHP Billiton, was shut down by displaced indigenous people seeking help, the government said.

The Mining and Energy Ministry said it was urging the Zenu people to engage in dialogue after their protests ground to a halt work at the massive open-air operation in Montelibano, in the northern department of Cordoba.

Protests began about a week ago, local officials said.

Colombia will lose about $185,000 a day due the shutdown, the ministry said in a statement. It did not say if dialogue was scheduled.

Ferronickel is used in industry, most commonly in making stainless steel. Anglo-Australian BHP Billiton is the world's biggest mining concern.

Zenu protesters blocked access to the operation on Wednesday morning, protest leader Celedonio Padilla told AFP.

The group of 6,000 Zenu are seeking about 8,000 hectares of land to relocate their community after the mining operation displaced them and started causing health problems including cancer, Padilla charged.

"People don't have anywhere to live, and they also are getting cancer from the mining operation" which has affected local soil and waterways from which native people generally fish as part of their subsistence lifestyle, Padilla said.

The mining ministry, which says it has made offers rejected by the indigenous people, has warned protestors to open the gates, and that it will "guarantee public order".

The ministry offered to set up a new indigenous reserve, Alto San Jorge, and to carry out health studies on possible environmental impacts of the mining.