Zimbabwean miner RioZim plans to ramp up gold production to 80 kg a month from the current 60 kg at its Renco mine by the end of the year, the company's managing director said on Tuesday. RioZim, previously owned by Rio Tinto, operates Renco gold mine in southern Zimbabwe and is a 22% shareholder in the country's largest diamond miner, Murowa, in which Rio Tinto has 78% shares. The company's managing director Josphat Sachikonye said exploration at Cam and Motor was encouraging, and plans to start an open pit gold mine were promising. "Renco mine should be producing 80 kg of gold per month by the end of the year," Sachikonye said in a written response to questions from Reuters. "The results of exploration work undertaken to date (at Cam and Motor) are very encouraging." Total gold production at Renco in 2008 was 456 kg but Sachikonye did not give target output for this year. RioZim said earlier this year it had targeted a gold production cost at $500 per ounce and that the company needed $30 million to capitalise its operations. Zimbabwe's gold production plunged to 3 tonnes last year as companies were forced to shut down due to hyperinflation, shortages of electricity and failure by the central bank to remit foreign currency to producers. But miners have restarted production after the Reserve Bank of Zimbabwe early this year allowed them to sell their own bullion to encourage production. Sachikonye said RioZim was continuing exploration at its Chimakasa project where it plans to open a nickel mine. The company's Empress nickel refinery is only envolved in toll refining of nickel from Botswana's Tati mines and Bindura Nickel Corporation, which is owned by junior African miner Mwana Africa Plc. Empress has capacity to process 700 tonnes of nickel a year but is producing 550 tonnes. COAL Sachikonye said RioZim had engaged potential investors to invest in its Sengwa coal fields in central Zimbabwe, which has proven ore reserves of 355 million tonnes and site of a power project that could produce 2000 megawatts. "Their (investors) coming on board is subject to the regulatory authorities availing RioZim the necessary prerequisites. Once these have been regularised, the company can more positively approach external partners," said Sachikonye. He would however not say if RioZim would consider increasing its stake in Murowa diamond mine after the government introduced an empowerment law forcing foreign-owned companies to sell majority shareholding to locals. The new unity government of President Robert Mugabe and Prime Minister Morgan Tsvangirai last month hosted an international mining investment conference where it re-assured investors that it would not expropriate their businesses. "At this stage, RioZim cannot speculate on whether it will increase its shareholding in Murowa beyond the 22 percent interest it currently holds," Sachikonye said. © Thomson Reuters 2009 All rights reserved

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