After the closure of Antwerp Diamond Bank (ADB), which accounted for around 11 – 12% of global diamond finance, and reduction of diamond financing by other banks including ABN Amro and Standard Chartered, there was a deficit of USD 1.5 billion in the global diamond industry financing. National Bank of Fujairah (NBF), partly owned by governments of Dubai and Fujairah – 2 of the 7 emirates of UAE, bridged in to partially address the financing and liquidity concerns of the diamond industry. Global diamond financing and trade in Dubai has witnessed a stellar rise in recent years.
Dubai Diamond Exchange (DDE), a platform of Dubai Multi Commodities Centre (DMCC), has gained significant share of the global diamond trade market and is continuing to grow into a major diamond capital, gradually surpassing Antwerp. Imports of diamond roughs into UAE rose to USD 5.9 billion during last year from USD 5.1 billion the previous year. Almas Towers, which is home to DDE, houses more than 1,000 diamond, precious metals and stones, and jewelry companies and provides comprehensive infrastructure and marketplace services including vaulting, polishing, certification, transport & logistics etc.
NBF, which is targeting loans between USD 5 million and USD 50 million for diamond trade, anticipates “a big shift of rough diamond traders to Dubai” according to NBF’s head for precious metals and diamonds – Davy Blommaert, as stated in a recent interview. Considering Dubai’s proximity to India, where majority of global diamond processing (cutting and polishing) takes place, Blommaert’s statement about diamond traders shifting their base to Dubai may not be farfetched. Moreover, many of the rough diamond exports from African mines have already started to route through Dubai.
Besides, 54 member participants representing 81 countries have recently voted and selected Dubai to chair Kimberley Process (KP) in 2016. KP is currently being chaired by Angola. Selection of Dubai as KP chair reflects the leadership potential of Dubai as a major diamond hub.
Though historically a pearl centre, Dubai has emerged as a leading global destination for diamond trade and holds ample potential to replace traditional diamond capitals like Antwerp.