* Ministry of Basic Industries to be eliminated
* Reorganization aimed at making government more efficient
HAVANA, March 1 (Reuters) - Cuba will create ministries of energy and mining as part of President Raul Castro's campaign to reorganize the government and make it more effective, state media reported on Thursday.
The existing Ministry of Basic Industry will be eliminated and some of its major functions taken over by the two new ministries, the reports said.
The restructuring has been in the works for months and is expected to continue with other changes aimed at both streamlining the government and reducing its role in running the economy.
The intent, said Communist Party newspaper Granma, is to put more of a premium on "efficient function, greater rationality and the reduction of all types of unnecessary expenditures."
The changes began last year with the elimination of the once-powerful Sugar Ministry, whose duties were turned over to a holding company.
The creation of a Ministry of Energy comes as a consortium led by Spain's Repsol YPF is drilling the first of what Cuba hopes will be a number of wells in the country's still-untapped oilfields in the Gulf of Mexico.
The Mining Ministry will oversee the island's nickel mining operations, along with other smaller mining projects. Nickel exports are one of Cuba's top sources of hard currency.
Castro, who succeeded older brother Fidel Castro in 2008, wants to cut 1 million workers from payrolls of the government, which is swamped with debt and short of cash.
He is encouraging self-employment to absorb those laid off and to increase productivity in an economy weighed down by low salaries and extensive bureaucracy.
Castro's goal is to strengthen Cuba's Communist system to ensure its survival into the future. (Reporting By Nelson Acosta; Editing by Jeff Franks and Sandra Maler)