By Nelson Banya
VICTORIA FALLS (Reuters) - Rio Tinto's diamond unit in Zimbabwe said it has begun work on a $300 million expansion programme to raise output six-fold, and was discussing with the government ways to improve the investment climate in mining.
Neils Kristensen, head of Murowa, the 300,000-carat-per-year diamond mine in southern Zimbabwe, said the firm had begun preparatory work for the planned expansion.
Rio Tinto owns 78 percent of Murowa, while Rio Zim -- a wholly Zimbabwean-owned unit spun off from Rio Tinto in 2004 -- controls the remainder.
"We have reinvigorated our feasibility study for a major expansion. The expansion will increase production by a factor of 6 to 7 times and double jobs," Kristensen told Reuters on the sidelines of a weekend mining conference.
"That would push our capacity to 1.8 million carats per year of high quality production, which is predominantly gem".
Rio Zim said last week the possibility of an improved investment climate in Zimbabwe had prompted Murowa shareholders to commission a review of expansion feasibility studies, to be completed by the end of 2010.
