The Dubai Multi Commodities Centre (DMCC) has known from the very infancy of its ambitious diamond project that selling office space in the some-70-floor Almas Tower would be the easy part. However, the creation of genuine added-value products – beyond the money made through transfer pricing exercises – has always been an urgent and challenging imperative.

From its beginning, the DMCC needed a sustainable business model. It also needed to make itself attractive to players around the world, and it needed to establish a real need for the diamond trade to associate itself with Dubai. Though these considerations may not have been phrased as such in his employment contract, ex-HRD manager Peter Meeus was brought to Dubai to carry them out.

This led to a rapid adoption of a Diamond Master Plan, which generated high expectations. Meeus and his team had everything but time. He was heading a “Manhattan project,” with cost overruns and time-delays; he was under great pressure to deliver – and to deliver now.

Meeus and his not-so “Little Antwerp in Dubai” team have now met these challenges, and in a rather big way. He and his team have launched Dubai’s International Diamond Laboratories (IDL) – the world’s only lab where the color grade is established totally by a state-of-the-art spectrograph, or, more precisely, the IDL Color Meter.

With a turn-around time of merely 48 hours, the IDL will issue a full grading report, based on Gemological Institute of America (GIA) standards, including the GIA’s patented cut grade. Showing its good will, the GIA has provided a license free of charge.

Sophisticated internet software will allow customers to follow the progress of the grading from home or the office. At the end of the grading process, they’ll get a digital diamond grading report, in addition to hard copies in English or Arabic. The owner of the stone can e-mail the digital report – which includes images of the inclusions and other features of the clarity grade – to clients well before the stone is physically returned. Says Meeus, “Internet images can convey far more than a hard copy ever can.”

The IDL certificates will, for the time being, still be manually graded for a clarity grade – and for this purpose some 20 Filipino girls have been trained. “They are excellent workers,” says Meeus, “precise, dependable, patient and accurate.” The Filipinos deal with clarity. They have been trained to also give an SI3 grade. Meeus stressed that there are no plans for establishing a clarity grade by machine, but it is known that major labs are conducting considerable research on such systems. IDL is not likely to forfeit its competitive advantage in automated grading.

Employment laws in Dubai enable companies to operate four daily shifts. IDL expects that these laws will provide it with the flexibility to meet the 48-hours turn-around time commitment.

Assuming that it all works as planned, this will not be just another lab. It will change time-honored practices throughout the diamond trade.

Changing Time-Honored Certification Practices
Color grading devices are not new. There are various commercially available devices. Actually, we have reason to believe that some major labs use spectrographs as part of their color grading process, but these labs also continue to rely on human eye inspections since the color grade should reflect what the human eye perceives.

IDL experts stress that the human eye cannot detect the full color range and that, through borderline judgments, some 35 percent of current color grading may not be fully accurate. Human color grading is influenced by external factors such as eyesight, sunlight, the types of lamps used, the fluorescence, and, we learned, even by factors such as global dimming, the weather, etc.  

According to Meeus, other labs “use the color instruments as a helpful indicator – but one cannot rely on it. IDL uses both a different technology and methodology and we can rightfully claim to be the only to offer accurate consistent and automated diamond color grading.”

No Set of Master Stones
Every major grading laboratory in the world, from GIA to IGI to HRD, relies on a set of master stones for color grading. These master stones either reflect the color scale from D to Z, which was developed by the GIA’s legendary Richard Liddicoat, or a different nomenclature.

The IDL believes that it has developed “ground-breaking technology that determines the exact color value of a diamond with accuracy far above existing color grading capabilities and in a consistent manner, which, specifically, is not based upon the perception of the human eye.”

The technology is also not based on a set of master stones. As IDL explains it, color grading results are charted on the IDL Satbar, a unique and accurate scientifically-based scale, while still reflecting the D to Z grades. The absence of master stones gives the IDL a significant advantage: it can open color labs in several locations while remaining consistent.

The IDL has measured the color saturation, hue, etc. of hundreds of GIA and other certificates and established the dividing point between D, E, F, etc. The IDL is so accurate that, if it wished, it could also establish a D1 or D2 (high and low D). However, it has refrained from doing so.

Some of the experts consulted by this writer argued that even the best machine in the world occasionally needs to be calibrated – requiring master stones. Meeus takes exception to this. “Like every measuring machine, the IDL Color Meter needs to be calibrated regularly. It needs however no master stones to do so.”

Machine color grading would provide, in theory at least, 100 percent consistency. The IDL management believes that with the development of diamond asset-backed instruments, futures and other derivatives, and the rapid commoditization of diamonds, a 100 percent consistency in color grading is a prerequisite. So far, no such option has been in the market. If it works – Dubai has truly delivered!

New B2B Color Certificate for Traders
In normal trading of large parcels, often the seller would allow the buyer to “take out” 20 percent or so of the lowest colors in the parcel. Especially with small goods, there are borderline cases.

To assist the trade, IDL will provide an IDL Color Certificate, which will confirm that the stone is natural and that it has not been treated. This certificate will also provide both the weight and the exact color grade. These color certificates will become available for something like $9 each.

For the purpose of issuing these color certificates, IDL will open labs in Mumbai and Antwerp. The full grading certificates, in a price range of $50-$70 for diamonds below one carat, will only be issued in Dubai.

Will the new certificates impact other labs? That remains to be seen. The IDL certificates will open up a whole new market as it can grade from 15 points and up – and it has a target to go down to five points. Marketing such small stones with full-fledged certificates may allow for charging premiums on these goods – which is IDL’s objective. Presently, the upper size ceiling for the certificates is five-carat stones.

Undoubtedly, the Dubai initiative will generate considerable debate. Some people will focus on the technology while others will concentrate on the “moral” issues – if I can use that term. It has always been the attitude of grading labs that what counts is what the human eye can see. The use of a loupe in excess of 10 times magnification has traditionally been avoided. The limitation of the human eyes also leaves some “illusion” in the certificates or the stones. “Illusion” is a crucial characteristic – which would disappear with machine grading.

To me, automated grading – if it works – is a natural progression of technological advances in the diamond business. It is unavoidable – and quite surprising that Dubai is going to be ahead in the game. Most traders will, I think, appreciate the advantages of consistency. Others will undoubtedly disagree.

The IDL will focus its initial marketing on clients in the Arab world, in Asia and in Mumbai. But the Indian goods are mostly sold to the United States, so the trade and consumers there too will have to make their choices.

The fact that IDL promises GIA standards at well below GIA prices may not be lost on many players. Moreover, there is bound to be an “HRD Factor.” Most, if not all, of the nine-person team of experts and scientists running the new laboratory have been hired away from the HRD. If this is all going to fuel enhanced competition – and a lowering of prices – the industry will win, irrespective of whose certificates one may prefer.

Stay tuned – this is just the beginning of an exciting story.

Have a nice weekend.