x Abu Dhabi, UAEThursday 27 July 2017

An inside look at Dubai's Diamond Exchange

The work inside Almas Tower in Dubai goes beyond the four C's of diamond work (carats, cut, colour and clarity).

ABU DHABI - 20FEB2011 - Nico D'Haemer, Managing Director of International Gemological Institute shows diamond testing at the Diamond lab at Jumeriah Lakes in Dubai. Ravindranath K / The National
ABU DHABI - 20FEB2011 - Nico D'Haemer, Managing Director of International Gemological Institute shows diamond testing at the Diamond lab at Jumeriah Lakes in Dubai. Ravindranath K / The National

Almas Tower isn't actually a tower at all. It is two towers: one facing north; the other, taller structure, stretching 68 floors and facing south. They overlap on their east-west axis and stand on a two-storey, eight-faceted, steel platform inspired by the cut of a diamond, or almas in Arabic.

Beneath are high security vaults, some sunk five storeys deep, designed to hold gold bullion, jewellery and, above all, diamonds. Because the largest facet of this steel diamond houses the Dubai Diamond Exchange (DDE). It's the biggest such exchange in the Middle East, and the market around which the robust grandeur of Almas Tower was built by the Dubai Multi Commodities Centre (DMCC).

DMCC's intention, according to its executive chairman, Ahmed Bin Sulayem, is to provide "a transparent, secure, sophisticated platform accommodating all aspects of the diamond trade … to encourage the trade through Dubai".

That project began in 2005 and, although the building opened in 2009 when traders, bankers and secure shippers moved in, it was only completed last month.

It has been three weeks since the International Gemological Institute (IGI) moved in and the final element of DMCC's plan slotted into place.

IGI certification offers legitimacy to the stones it grades and to the market that trades them. The company is one of only three globally recognised certifiers. The others are Hoog Raad Voor Diamont in Antwerp, a subsiduary of the Antwerp World Diamond Centre, and the Gemological Institute of America, whose headquarters are in Carlsbad, California.

Until last month IGI-Dubai was a small office on the edge of the city's Goldland, a location symbolic of the diamond trade's status relative to the traditionally dominant gold and pearl markets.

But times, and tastes, have changed. Today, diamonds account for 50 per cent of Dubai's gem and jewellery market. Rough and cut, in the first half of 2010, 131 million carats' worth of diamonds arrived in Dubai. That's 59m more than the corresponding part of 2009. They came primarily from India, Belgium, Switzerland and, increasingly, Angola and Democratic Republic of Congo.

Whether it's a consignment of loose stones bought by a trader parting with hundreds of thousands of dollars in one transaction, or a single rock bought by a lovestruck romantic who will buy one such stone in his life, the only way anyone can really know what they're getting is with certification such as that offered by IGI.

Speaking from his corner office, Nico D'Haemer, the managing director, said: "We have 18 offices in the world. Now this is the hub of the diamond trade in the Middle East. A few years ago only the happy few were buying diamonds. Now it's the happy many."

He attributed this to the resilience the diamond market showed in the recent financial crisis. Still, prospective buyers remain cautious. "That makes our service more important. Historically the diamond market operates on a system of trust. Dealers will take hundreds of thousands of dollars worth of diamonds on consignment and promise to pay within 180 days time and the deal is done on nothing more than that vow.

"That trust is still at the heart of it, but today there are people buying diamonds who once could not. They want reassurances."

Shirley Bassey may have averred "diamonds never lie to me", but she was wrong: they can and they do.

"Everybody can be fooled," Mr D'Haemer said. "That's why when friends ask me at parties if I'll look at their diamond ring or whatever I say, 'Yes of course. Just drop it off in the office'."

Born in Antwerp, Belgium, the grandson of a diamond polisher, the trade would seem to run in Mr D'Haemer's blood. Sitting at his cherrywood desk, flanked by screens streaming security camera footage covering every angle of the laboratories next door, Mr D'Haemer is the very image of what one might expect of a diamond certifying MD operating at the epicentre of a multimillion facility.

But, as his profession bears witness, appearances can be deceptive. He admitted, "I'm a lab rat. I only wear a tie or sit in my office when meeting people." Pointing towards the secure door that separates the front offices from the facility within, he said: "That's where I spend most of my time."

The state-of-the-art laboratories in this new Dh11m facility are spread over 5,000 square feet and are home to more than 40 dedicated experts. Here, it is apparent that diamonds, when viewed by Mr D'Haemer and his team, are not dazzling baubles. They are scientific specimens, cooly scrutinised in their thousands every week.

Each is judged according to the four Cs: carat, cut, colour and clarity.

When a customer deposits a loose stone, its carat weight is taken at reception, a security code is assigned and it is popped into a buff envelope.

Several deliveries of these slim envelopes arrive during a recent visit. However routine the bulk of the arrivals, Mr D'Haemer will never forget the day he opened one such envelope and a diamond necklace with a 63-carat stone as its centre piece - and 300 carats' worth of surrounding stones (the smallest was 1.5 carats) - tumbled onto the laboratory bench.

"I'll be honest I didn't sleep well knowing that was in my safe. That's a big responsibility. It's almost impossible to put a value on anything above 20 or 30 carats because beyond that items are sold at auction if at all."

Jewellery is only ever graded within a range because a stone's mount affects its colour and weight has to be calculated from measurements taken with a tiny ruler and gauge. The gauge, which is electronic, pincers the gemstone and digitally measures its depty to an accuracy of 1/100 millimetres.

The grading of loose stones is as precise. The stone is placed in a screening machine that can detect whether it is synthetic. Among natural stones, the screener can identify between the two main categories and among a myriad of subcategories. This matters because some diamonds can be treated to enchance colour, for example. Shady diamond dealers can make a brown diamond seem colourless, which is tantamount to fraud because they provide the appearance of greater quality in a diamond than exists. But the fraud is shortlived: some chemical treatments are unstable and wear off.

"We work by elimination," Mr D'Haemer said. "So if the stone is a type that cannot be treated, we don't need to test for types of treatment it might have had. If it can, we do. Some treatments are acceptable, some are not."

A corner of the laboratory is devoted to detecting how stones have been treated to make them brighter, lighter and seem more valuable. The processes used are secret because, Mr D'Haemer said, "if the criminals know what we do they will find ways to get round it".

Once the type of diamond is noted, it goes into a machine that resembles a top-loading CD player but which actually grades the cut. Here the diamond is rotated and measured from every angle; its image appears on a computer screen, twirling and dipping in and out of focus. The cut is rated from "ideal" to "poor".

From there, the stone is taken to one of the ranks of personnel who grade colour. This is done by eye. The stone under scrutiny is compared with diamonds in one of the facility's three "master sets", which run from D to K on the colour spectrum.

When placed side by side, the difference between the two extremes of this spectrum is obvious. D is colourless and the letter where the scale begins - "Don't ask me why it isn't 'A'," Mr D'Haemer said, shrugging. K is yellow and on the cusp of "fancy" colours. The value of diamonds peaks at the opposite ends of the spectrum, the colourless and those with vidid colours being most desireable.

Each stone is placed on a brilliant white card and placed beneath intense light. The card is regularly replaced because even a few specks of dust can affect colour. The colour is checked by at least two experts. If they disagree, a third - usually Mr D'Haemer - is consulted.

During this initial colour test the diamond is placed table down, or face down, on the card. It is then viewed under an ultraviolet light. If it glows with fluorescents, the colour is checked again, this time with the table up - facing towards the technician.

Mr D'Haemer explained: "Without fluorescents the colour is the same whichever way you view it. But fluorescents make a stone brighter when viewed table up. Table down it might be G; table up, it could be F. That's the way it will be seen when mounted so that's the colour it's graded."

The last test checks the stone's clarity by detecting imperfections on its surface or deep within. The final grade - from IF (internally flawless) to imperfect - is given according to what is visible through an eyeglass that magnifies to a strength of 10.

But the gemologist's eye is initially guided by studying the stone through a microscope at a magnification of 50, picking out crystals that may feather within it or dark inclusions that can speckle it. At worst, Mr D'Haemer said, a diamond can look as though "there is a war raging inside it".

An untrained eye looking through a microscope at a five-carat diamond will find it difficult to see past the dust on its surface. "You look with normal eyes," Mr D'Haemer said. "We see more clearly. We don't see the dust. We only see what we need to see."

It is a light-hearted comment, but it resonates with something more serious. What, after all, does one "need" to see when it comes to diamonds?

Besides the four C's, there's the issue of provenance, which is determining where the diamond comes from.

IGI has had links with DMCC since Almas Tower's inception. Before the ground was broken on the plot, DMCC flew IGI experts from its Antwerp headquarters to train members of staff in gemology, diamond sorting, treating, synthetic and rough diamonds.

It was an astute move given the UAE's recent recognition of the Kimberly Process. In 2001 the UAE became the first Arab nation to recognise the international agreement not to trade in conflict or "blood" diamonds and it was the first time DMCC staff had been trained to international levels.

But today, IGI's Dubai staff are still occasionally called upon to test rough diamonds arriving in the country without papers.

Mr D'Haemer said: "You can tell by chemical composition what area stones are from. Give me a sapphire and I can say with 90 per cent accuracy what mine it's from. But with diamonds you can only be 70 per cent accurate."

In terms of monetary value, the only thing that can be said of rough stones is whether or not they are diamonds. This IGI laboratory deals only with cut stones.

In theory, by the time a diamond is cut, polished and deposited at IGI it will have satisfied the Kimberley Process at the port of its arrival. Mr D'Haemer and his team must take this for granted and there are no further questions asked. IGI is, after all, an independent certifier not a market watchdog or legal enforcer.

Besides, none of these documents are a legal requirement in the marketplace. Ultimately, it falls to the consumer to ask for documents to support any claims made regarding a diamond.

But DMCC's public backing of the Kimberly Process, now bolstered by its positioning of IGI at the heart of the Almas Towers, shows a keen awareness of the importance of promoting "transparency" as a founding value of the UAE's diamond trade.

Diamonds may be unbreakable but reputations and markets need careful handling and constant scrutiny.

 

How much diamond you can buy for 38,000 dirhams

1 carat

Colour D (colourless)

Clarity VS2 - very slightly included 2 (inclusions or blemishes are fractionally more easy to locate under 10x magnification)

Cost 37,434

2 carats

Colour J (low end of colourless spectrum)

Clarity VVS2 - very very slightly included 2 (inclusions and external blemishes very difficult to locate under 10x magnification)

Cost 37,434

3 carats

Colour K (slightly tinted)

Clarity: VS2

Cost 38,535

4 carats

Colour M (bottom of slightly tinted spectrum, on cusp of very light yellow)

Clarity VVS2

Cost 37,434

5 carats

Colour E (colourless)

Clarity SI3 - slightly included, on the cusp of imperfect (inclusions and external blemishes easy to locate under 10x magnification and may be visible to the naked eye)

Cost 38,168

 

lcollins@thenational.ae