Rio Tinto says their Zimbabwe operation could increase 6 fold, meanwhile government seeks to stabalise investment environment.

Rio Tinto (LON:RIO) says it could boost its diamond production in Zimbabwe 6 fold - if conditions justified increased investment.

Niels Kristensen, head of Murowa, Rio Tinto's diamond mine in Zimbabwe said the group produced 260,000 carats in its last financial year, but this could soar if the country brought certainty to the mining sector.

There have been positive developments for the mining sector over the course of the past week indicating the government is eyeing mining as one of the key industries to pull Zimbabwe out of its economic depression.

Amongst these developments is Zimbabwe’s mines minister pledged to cut the time it takes to obtain a mining license to a maximum of six months to help the economy recover.

At a mining conference being held in Harare this week President Mugabe took to the stage to encourage investors to come into the country saying their property and investments were guaranteed.

There are also indications that mines would not be expected to give up 51% ownership to locals as was feared last year.

Saviour Kasukuwere, the minister for indigenisation, said that the government was ready to consider easing the proposed regulations and that any local business partners should have cash to invest.

"The 51% stake is not a pre-requisite for investment. We are saying bring your money and we will not illegally take it," Kasukuwere said.

By Staff reporter and agencies