* Ferronickel mining, processing resumes partially
* Company says renegotiating with indigenous groups again
* Global nickel market pressured by large stocks
BOGOTA, Oct 10 (Reuters) - Colombia's Cerro Matoso, theworld's No. 2 ferronickel producer, partially restartedoperations on Thursday after protesting indigenous groups liftedtheir blockade of the mine's entrance.
Cerro Matoso, owned by mining multinational BHP Billiton, supplies 4 percent of the world's ferronickel. Asurplus of nickel, the metal derived from ferronickel, hasdriven its price down around 20 percent so far this year.
News of the mine's closure on Wednesday helped London-tradednickel contracts to firm on Thursday to $13,750 a tonne,up from a closing price of $13,660 per tonne in the priorsession.
The intervention of the regional and national governmentsmade it possible to resume dialogue with indigenous communityleaders and restart both mining and on-site industrialprocessing operations, the company said in a statement.
"Cerro Matoso trusts that this rapprochement will make itpossible to normalize completely all the company's operations,"it said.
The company has not explained the reasons for two weeks ofprotests by the indigenous groups, but a mining ministry sourcetold Reuters the demonstrators were seeking compensation forpollution from the mine which they say has damaged their health.
Colombia's ferronickel production surpassed 47,000 tonnes in2012, according to National Mining Agency data.
Colombia's mining sector, much of whose output is stillextracted by artisanal or illegal miners, has attracted a lot ofinvestment, together with the oil sector, helped by a vastimprovement in the country's security situation. A decade-longU.S.-backed offensive against the country's left wing guerrillagroups, the FARC and smaller ELN, has slashed their numbers.
