Diamond Trading in the UAE
Nowadays, the United Arab Emirates (UAE) is the world’s largest rough and polished diamonds trading hub, with the trade carried out via the Dubai Diamond Exchange (DDE). The Dubai Diamond Exchange is located in the Almas Tower where the offices of diamond companies like Damas, Dhamani Jewels, Rosy Blue, Dimexon and Diarough are housed, as well as the offices of international crediting establishments like ABN Amro, Antwerp Diamond Bank, etc. providing financing to diamond companies. Besides, there are facilities to clean and cut diamonds, and where storage services for polished diamonds and gold are provided.
Table 1 shows the dynamics of the UAE diamond trade in 2004 through 2012.
Table 1
Diamonds Imports and Exports in 2004-2012
Based on the Kimberly process data for 2004-2012
The table analysis suggests that with the approximately even diamond imports and exports in carats, the net diamond value of trade in 2011-2012 already totals over US$2 billion per year. The most surprising in this situation is that the UAE - within a decade - has taken the leadership in the global diamond trade without having mined a single carat of diamonds or setting up cutting facilities in the country.
At the same time, the diamond exchange is only a top of the commodity exchange trade iceberg in the Arab Emirates. The Dubai Government has established the Jumeirah Lakes Towers Free Zone (JLT Free Zone) near the sky-scrapers in the area of beautiful lakes and the Dubai Multi Commodities Centre (DMCC), where the precious metals and gemstones are traded including the rough and polished diamonds as well as the other industries’ commodities.
The prospects for the UAE diamond business development
Taking into account the diamond business development in the UAE, the following conclusions can be made:
1. Over a relatively short period of time, Dubai has turned into a world trading hub for not only raw materials, but also rough and polished diamonds and diamond jewellery thanks to substantial financial resources and developed infrastructure meeting the market requirements. While the diamond trade was not carried out in Dubai in 2001 – it was below US$5 million – in ten years, the rough and polished diamonds trade increased up to over US$39 billion.
2. The further growth of the UAE as the global diamond trading hub will continue as Dubai with its developed air and sea links has an optimal geographic position being located between the manufacturing and consuming countries, which makes the business easier.
3. The Russian and Yakutian diamantaires as well as the representatives of other businesses should scrutinize thoroughly the UAE experience in the development of the raw materials exchange trade and turning Dubai into a new world’s diamond trading centre. The practical implementation of this experience under the conditions of our country would allow Russia and Yakutia also turn into one of the world leaders not only in the geological resources mining but also in their trading.
Yuri Danilov, Director of the Department of Subsoil Management Economics, Institute for Regional Economics of the North at Ammosov North-Eastern Federal University
