Maputo- The government of Mozambique is finalizing contracts with eight companies to begin prospecting for diamonds in the centre of the southern African country, reports said Friday.

Any discovery of the gems in the Save River valley in Sofala province would be a first for the former Portugese colony, which is enjoying strong growth as it picks up the pieces after a 16-year civil war that ended in 1992.

Mozambique's daily Noticias newspaper reported that the government had launched a tender in March, which culminated with the awarding of diamond exploration licences to eight companies.

Some of the companies are joint ventures between Mozambican and foreign companies but the report did not reveal which foreign companies were involved. One of the concessions was awarded to an individual, Amilcar Octavio Paulo.

According to the deputy national director for mines, Obete Matine, the government decided to encourage diamond exploration after learning there were strong possibilities of the existence of alluvial diamonds in the Save River valley.

"Geologically, we think across the Save valley we can find diamonds because geological structure of the area shows a tendency of the existence of the mineral," he was quoted as saying.

The government carved up the valley into eight concessions, which were then shared out among the companies, he said.

The state expects to conclude the contracts with the companies in August, paving the way for the start of exploration activity as soon as November, Matine said.

Mozambique is also expected to sign the Kimberley Process, a certification scheme designed to ensure diamonds traded internationally are not financing conflicts or so-called "blood diamonds."

Mozambique's neighbours Botswana and South Africa are the world's largest and fourth-largest diamond producers respectively. (dpa)