(Adds QMM statement)

By Alain Iloniaina and Eric Onstad

ANTANANARIVO/LONDON, April 1 (Reuters) - Mining group Rio Tinto <RIO.L> <RIO.AX> said police and troops searched its titanium mine in Madagascar on Wednesday for arms and mercenaries, but found nothing.

Rio, Madagascar's biggest foreign investor, owns 80 percent of the QMM mineral sands operation at Fort Dauphin in the south of the Indian Ocean Island. The government owns the rest.

"The security forces found nothing suspect following the search. A document to that effect was signed after the search," a QMM spokesman told Reuters in Madagascar.

Troops with a search warrant conducted a peaceful search in the afternoon and demanded a list of foreign workers, QMM said in a statement.

The statement referred to rumours that had been circulating for several days, but did not give details.

The new government has been worried that former President Marc Ravalomanana, who quit under pressure from the military, plans to use South African mercenaries to retake power.

Thousands of pro-Ravalomanana supporters held a rally in an Antananarivo park on Saturday -- the sixth in six days -- and 34 people were injured during the protests. [ID:nLS478848]

On Monday, Southern African leaders suspended Madagascar from the SADC regional grouping and called on its new President Andry Rajoelina to step down. [ID:nLU92301]

Rajoelina, who took power in a move that was condemned as a coup by the international community, has said his administration was reviewing all contracts with foreign investors because the country was receiving too little revenue. [ID:nLU47467]

Rio, the world's third biggest diversified mining group by market capitalisation, has not had any communication from the new government about contracts and the mine was still operating normally, Rio spokesman Nick Cobban said in London.

Rio launched production in January at the mine, which cost $1.2 billion to build, and Cobban said the first shipment was due this month.

Its main product is titanium, a white pigment used in paint and other coatings, paper, plastics and cosmetics. (Additional reporting by David Clarke in Nairobi; Editing by David Cowell and Elaine Hardcastle)

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