The high-security bullion vaults deep within Dubai's Almas Towers will have to make room for some of the finest diamonds in the world after a new grading laboratory for gems and jewellery opened there yesterday.
"It is very important to be here," said Roland Lorie, the chief executive of the International Gemological Institute (IGI), the world's largest diamond and gemstone certifier. "Dubai can go one step forward from being a jewellery seller, in the souqs, Gold Land, and all the shops … It can become the [trade] capital for the entire Middle East," he said at the official opening of the 465 square metre, US$3 million (Dh11m) DMCC facility.
With more than 40 staff, hundreds of items can be analysed, graded and certified daily, he said.
Almas Tower is home to the Dubai Multi Commodities Centre (DMCC), through which hundreds of millions of dollars' worth of gold and precious stones pass every day.
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Dubai is more traditionally associated with pearlsand sales of gold jewellery in its souqs and shopping centres.
But the demand for diamonds is growing in the emirate and now accounts for more than 50 per cent of Dubai's jewellery trade, said Mr Lorie. Although there was a slump in demand in 2009 amid economic uncertainty, the diamond trade has started to shine again.
"Luckily we saw, and very surprisingly even, the demand for diamonds today is bigger than before the crisis … yes the crisis is not yet over. But diamonds, beside just being a jewellery item and a decoration item, [also has a role] as a [financial] security item."
While official figures for last year's total diamond trade through Dubai have not yet been released, in the first half of last year it grew by 115 per cent to $16.3 billion up from $7.6bn in the first half of 2009, according to the DMCC.
Last year, more than 100,000 gems and jewellery pieces were certified through the IGI's laboratory sited in the Deira Gold Souq, said Mr Lorie. That is more than 50 per cent up on 2009, and a little above the peaks of 2008, he said. "The market has picked up but, at the same time, people are asking for more certification," Mr Lorie said. "In 2007, 2008, those were great years. But people were just buying. [Some] of the consumers were asking for certificates, but the others would just buy. Now, the difference is that people are still buying but they are more conscious [of the need for gem certification]."
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The new lab is part of a push by the DMCC to direct diamond trade through the Dubai Diamond Exchange. In 2008, the Dubai Government became the first in the world to undertake gem stone authenticity certification. The operation, developed by International Diamond Laboratories (IDL), a subsidiary of the DMCC, and the jewellery retailer Damas, was intended to boost consumer confidence in diamonds traded through the emirate. The IDL has a facility in Jebel Ali.
Gem certification is not required by law in the UAE, but DMCC officials do not believe it is necessary to make it mandatory through new legislation, said Ahmed bin Sulayem, the executive chairman of the DMCC. Certification is left up to the consumer, he said.
Mr Lorie agreed. "The consumer has to ask for it, and the jeweller has to be willing to give it and the consumer has the option whether or not to buy it," he said.
One issue of contention regarding the diamond trade, however, is "blood" diamonds - those linked to conflicts or human rights abuses. In December, the UAE joined an international ban on trade in blood diamonds from the Marange fields in Zimbabwe.
US embassy cables released by the whistleblowing website WikiLeaks in the same month alleged the involvement of Robert Mugabe, the Zimbabwean president, and his wife and other officials in funding illegal panning in the Marange fields.
Mr bin Sulayem said the DMCC was fully compliant with the Kimberley Process, a certification scheme set up by the UN in 2003 to control the trade in uncut diamonds and prevent them being used to fund violence.
"As far as I'm concerned, and the UN is concerned, the UAE is a compliant member of the Kimberly Process and we're the first Arab country to be a member. And it's an initiative we take very seriously."