European economic woes take shine off Alrosa diamonds... but gold gleams

Production for the first six months of 2012 fell to $70.6 million compared with an initial target of  $119.7 million.

The Ministry for Economic and Industrial Development in the Sakha Republic (Yakutia) blames the fall mainly on the economic crisis gripping Europe. 

Some 86 per cent of rough diamonds are exported from Siberia's largest region. 

Reports this week indicate that demand for polished diamonds remains 'dull' in the international market due to 'lack of liquidity'.

Alrosa's rival De Beers similarly reported a 14 percent drop in diamond sales and a similar fall in rough diamond sales for the first six months of the year.

Alrosa's response has been to produce cheaper jewellery items, a move which led to a $258 million profit for the first three months of 2012, well ahead of the planned $159 million. 

There are hopes that a stabilisation of the euro, and the Christmas sales, will give a more sparkling outlook.

If diamonds were down, gold was up in Siberia. 

Russia's GV Gold produced 2.7 tonnes of gold in the first six months of the year, an increase of 42.56% on the year.

Revenue jumped 69.41% on the year, it was reported. 

Nine of GV Gold's ten licenses to develop gold deposits are in Irkutsk Region.