Rio's Zimbabwe unit 2010 diamond output up 43 pct

Diamond output from global miner Rio Tinto's Zimbabwe subsidiary rose by 43 percent in 2010, and the firm continues to review plans to expand the mine, the local minority shareholder in the venture said on Thursday.

Diamond production at Murowa mine in southern Zimbabwe rose to 178,126 carats from 124,422 carats in 2009, said shareholder RioZim Limited, which holds a 22 percent stake in the main and was itself owned by Rio Tinto until 2004.

"However, only 141,000 carats were sold at higher average prices than the 162,000 carats sold in 2009," RioZim said.

Murowa is planning a $300 million expansion to lift output to 1.8 million carats but has delayed the project due to a law that seeks to force foreign-owned firms, including mines, to cede 51 percent shares to locals. Rio Tinto controls 78 percent,

Murowa resumed diamond exports in August last year after a six-month government ban, which analysts say was meant to pressure world gem regulator Kimberly Process to allow Harare to sell its diamonds from Marange, in the east of the country.

There are two kimberlite diamond mines in Zimbabwe -- Murowa and privately owned River Ranch -- and at least four alluvial diamond firms in Marange, where human rights groups have accused the army of rights abuses when evicting illegal miners in 2008.

A government minister told Reuters last week that the government would proceed with plans to take majority stakes in foreign-owned diamond mines operating in the country but would spare those operating in Marange, including a Chinese-owned mine.