Bloomberg
Dubai


Dubai’s diamond trade will grow as the Gulf emirate attracts dealers from the industry’s traditional hub in the Belgian port of Antwerp after one of the city’s main gem lenders closed, depriving buyers of needed financing, according to National Bank of Fujairah.
“Do we anticipate a big shift of rough diamond traders to Dubai?” Davy Blommaert, unit head for precious metals and diamonds at National Bank of Fujairah, said in an interview. “Yes, that we foresee,” he said at the lender’s office in Dubai.
Dubai, historically a pearl centre, is growing into a trading hub for the $57bn global diamond market to take advantage of its transport links to India, the world’s biggest importer, and expanding financing available to the industry. Imports into the UAE rose to $5.9bn last year from $5.1bn in 2013, according to the Kimberley Process, set up to stop the supply of blood diamonds from war zones.
National Bank of Fujairah, partly owned by the governments of Fujairah and Dubai, two of the seven emirates in the UAE, entered the diamond financing market about six months ago to capitalise on the shift in trade and is targeting loans between $5mn and $50mn, Blommaert, 34, said.
Diamond buyers will face a lack of financing after Antwerp Diamond Bank, the lender that served the industry for 80 years, winds up operations, removing about $1.5bn in funding to the industry. ABN Amro Bank and Standard Chartered also curbed funding to the industry.
Antwerp imported about $16bn of diamonds in 2014, according to the Antwerp World Diamond Centre, citing data from the Kimberley Process. Global diamond imports totalled about $57bn last year, according to Kimberley Process data. India, where most manufacturers of diamond jewellery are located, took in $17.2bn of the stones last year. The UAE will take over as chair of the Kimberley Process next year, according to a statement on September 15 from the Dubai Multi Commodities Centre, the business zone established in the emirate to foster trade in raw materials.
Angola is the current chair, according to the Kimberley Process website. Blommaert, who worked at the Antwerp bank before joining the UAE lender in February, said the Belgian institution accounted for about 11% to 12% of the global diamond finance market. Traders use loans to buy rough, or uncut, diamonds in auctions from mines in resource-rich areas like Africa.