Zimbabwean Defence Minister Moven Mahachi said both countries were finding it difficult to sustain their military operations, the government-controlled Herald newspaper reported.

Mr Mahachi described the venture as a "noble option".

"Instead of our army in the DRC burdening the treasury for more resources, which are not available, it embarks on viable projects for the sake of generating the necessary revenue," the minister said.

The minister said a company called Osleg had been registered to operated alongside Comiex, a private company owned by the DR Congo army.

Buying and selling

The two companies will be granted licences to buy and sell diamond and gold and will set up four offices manned by military officers, the Herald reported.

They will buy minerals from small-scale producers and sell at the Kinshasa Precious Mineral Market, either by public tender or by auction.

Zimbabwe has some 11,000 troops supporting the government of President Laurent Kabila in his conflict with rebel groups, although the terms of a ceasefire signed in July stipulate that all foreign troops should withdraw.

The military intervention has been unpopular in Zimbabwe, with trade unionists and opposition politicians saying the estimated monthly bill of $3m could be better spent at home.