Dubai trader buys a Dh23m pair of diamonds at New York auction

DUBAI // A Dubai diamond merchant has paid more than US$6.3 million (Dh23m) for two stones at an auction in New York. Amer Radwan, from Radwan Diamond and Jewellery Trading, bought the Ponahalo diamonds made from an original 316 carat gem unearthed in South Africa. The two diamonds, weighing 70.87 and 102.11 carats, sold for $2.15m and $4.11m in phone bids. An auctioneer for Christie's said he had been authorised to disclose the buyer as Mr Radwan.

The sale of the Ponahalo diamonds - the word means "vision" in an African dialect - is the second major acquisition attributed to Mr Radwan. Three years ago, he bought a 25.02 carat pink-hued diamond for just over $6m, also in a phone bid at a Christie's auction in New York. He dubbed the internally flawless gem the Rose of Dubai and it sold for more than double the pre-auction estimate. The diamonds were bought against a backdrop of global economic slowdown. The Christie's auction, which covered everything from Tiffany bracelets to gem-encrusted Montblanc fountain pens, grossed $29.7m, about $5m less than expected.

One dealer described the diamond market as "dead" compared to three months ago. The wealthy often invest capital in precious jewels and metals during recessions. Mr Radwan's motives are unknown and he could not be contacted yesterday about his latest acquisitions. The sales have helped establish Dubai as an increasingly important site in the world diamond industry, challenging traditional centres such as Antwerp, New York and Tel Aviv by becoming one of the 26 diamond bourses around the world.

In the first six months of 2008, more than $3.03 billion worth of rough diamonds were traded through Dubai, up from $2.21bn for the first half of 2007 and $1.91bn for the same period in 2006. The UAE is also the third biggest buyer of diamond jewellery, after the US and Japan. Ahmed bin Sulayem, the Dubai Multi Commodities Centre executive chairman and deputy chairman of the Dubai Diamond Exchange, said the surge was "testament to Dubai's success in attracting traders from around the world".

Gem Diamonds, one of the world's leading diamond companies, has begun establishing analysing, cutting and polishing facilities in Dubai and Mauritius, which it expects will begin operating next year. The Gem Diamonds director Glenn Turner said there was a chance that buyers would want some of the huge diamonds being found to be cut locally. [e-mail] With additional reporting by AFP