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* Some EU states oppose move, want more political progress
* EU sanctions on Zimbabwe must be renewed by Feb. 20
By Adrian Croft
BRUSSELS, Feb 13 (Reuters) - Belgium is pushing for European Union sanctions on a Zimbabwean gold and diamond mining company to be lifted, putting it at odds with some of its EU partners days before a deadline to extend sanctions on Zimbabwe, EU diplomats said on Wednesday.
EU sanctions against Zimbabwe's President Robert Mugabe and dozens of other people and companies close to Mugabe's ZANU-PF party are renewed annually and EU countries must agree to extend them before they expire on Feb. 20.
EU diplomats say some people and companies are likely to be removed from the list of those covered by visa bans and asset freezes, in line with EU efforts in the last few years to encourage democratic change in Zimbabwe.
But a stumbling block has emerged over one of the companies listed, the state-run Zimbabwe Mining Development Corporation (ZMDC), which the EU said last year was "associated with the ZANU-PF faction of government".
The sanctions ban financial transactions with the firm from Europe and freeze any assets it may have in Europe.
Belgium says it wants sanctions lifted on ZMDC, which operates five diamond mines in Zimbabwe's rich Marange fields.
Other EU countries, such as Zimbabwe's former colonial ruler Britain, believe consideration of lifting sanctions on ZMDC should wait until after elections expected in Zimbabwe in July.
EU diplomats are due to discuss the issue on Thursday and it will be on the agenda of EU foreign ministers on Monday.
Mugabe, who has ruled Zimbabwe since independence in 1980, shares power with Prime Minister Morgan Tsvangirai in an uneasy coalition formed after a disputed 2008 election which was marred by violence blamed on ZANU-PF militants.
The Marange diamond fields have been notorious for violence, with rights group Human Rights Watch alleging in a 2009 report that Zimbabwe's military killed more than 200 people in a takeover of the fields in late 2008.
Belgium, home to the world's largest diamond trading hub, Antwerp, argues that the situation in Marange has completely changed and sanctions on ZMDC are no longer justified.
Belgium's Foreign Ministry noted that the Kimberley Process, a monitoring organisation set up to stem the flow of diamonds used to finance conflicts, had certified Marange gems as compliant.
"Experience has shown that, in this particular case, sanctions are counter-productive by diverting diamonds to less transparent markets," a ministry statement said.
Global Witness, an organisation which campaigns against violence and corruption linked to minerals, said it opposed Belgium's move to lift sanctions on ZMDC and urged the EU to strengthen restrictions on sales of Marange diamonds to Europe.
The group said it believed there was a serious risk that diamond revenues could be used to fund violence in this year's Zimbabwe election.
"The Belgian government is claiming concern for the Zimbabwean people. However its true interests are closer to home in the diamond markets of Antwerp," Global Witness campaigner Emily Armistead said in a statement.
Zimbabwe expects diamond production from its Marange fields to double to 16.9 million carats this year, the state-owned Herald newspaper said last month. ZMDC's five mines in Marange produced 8 million carats in 2012, generating $685 million in exports. (Editing by Michael Roddy)