* Bags more than $20 million investments this year
* Gatumba Mining Concessions to start extraction
By Hereward Holland
KIGALI, October 13 (Reuters) - Rwanda has raised its expected earnings from mining this year by 33 percent to $75 million after a global rally in prices of tin and other metals, the government said on Tuesday.
Although indicative of renewed optimism after the global economic downturn, the latest estimates are still lower than the $91.3 million earned in 2008, which represented a third of Rwanda's total exports, based on Central Bank's figures.
Vincent Karega, minister of natural resources, said swelling demand for raw materials and improving international prices would lead to an increase in production, as the world economy regained momentum.
"I can now get more optimistic and think that we may now easily reach about $75 million," Karega told Reuters.
Despite the global slump, Rwanda's nascent mining industry has already registered more than $20 million investment this year, including from Chinese firm Xiamen Tungsten.
Artisanal miners, who have dominated the sector since it collapsed during the 1994 genocide, were organising into cooperatives, Karega said.
The move could improve labour practices, environmental protection and ultimately help increase production, he added.
South Africa-based Gatumba Mining Concessions, which is part-owned by the Rwandan government is also poised to begin extracting tin, tantalum and tungsten, Karega said.
"They are halfway done with the exploration. They can now shift to exploiting the half-done exploration site which is very promising," he said.
Karega said the government was looking to reopen a tin smelting plant owned by Phoenix Metal, which shut down operations in 2006, citing unreliable and unaffordable electricity supply, by subsidising the cost of power.
Rwanda's relative stability over the last 15 years has made it a link for re-export of minerals from its war-torn neighbour Democratic Republic of Congo (DRC).
But trade has slowed this year, Karega said, as buyers in Europe and America cut back orders over concerns about inadvertently funding violent armed groups who continue to destabilise eastern DRC.
British campaign group, Global Witness, which exposes corrupt exploitation of natural resources, has said companies trading in minerals from the DRC should carry out thorough due diligence to ensure they are not funding warring parties.
"There is a slowdown because of all these talks and the campaigning for Congolese minerals," Karega said. "The issue is really to remove the criminals rather than removing trade."
Campaigners say the militias, which include Rwandan Hutu rebels responsible for the genocide and rogue Congolese army brigades, use revenues from the illegal taxation of minerals to fund their activities.
They say the trade has helped to fuel a conflict in which over 5.4 million people have died. (Editing by James Jukwey)