The single most important issue in the global diamond industry today is the need to develop new mines. This is essential if an assured supply of raw material to all the processing centres is to be maintained in future. Right now, demand outstrips supply and the gap is set to grow over the next few years as all the new discoveries put together cannot make up for the shortfall generated by the peaking and decline of the world’s existing big mines.

Small wonder then, that the diamond world pays such inordinate interest to the doings of the junior exploration and mining companies. While the majors are looking, the juniors are the ones with the flexibility to look in the most impossible places and generally take chances the majors wouldn’t. Don’t forget, it was the junior miner Aber that found Canada’s Diavik mine. Eira Thomas, daughter of Aber’s founder Grenville Thomas, was reportedly the one who insisted that the survey team actually take core samples from the floor of the lake. The rest, as they say, is history.

But according to this report, things aren’t looking good for the juniors now. Given the slowdown in the US and the financial problems in global markets, the juniors who don’t have any actual production already going, will find it tough getting further funding to carry on. The majors though, with proven track records and deep pockets, will find the going much easier.

What it all means is that the forces of consolidation working on the cutting and polishing and distribution sector, are going to impact mining as well. In mining, which has a handful of players to start with, what this will mean is that rough diamond supplies will tend to stay in the hands of the current chosen few. This also means it will be easier for them to dictate terms in the future.