Thank you for replying, and yes I know how permanent magnets work. Although it doesn't really answer my question, since I was talking about a single magnet before and after grinding.
I really should have explained about how diamagnetic levitation works (at least how it should work in my case) to save time:
The magnetization of the permanent magnets will be directed in-plane and opposite in direction to each other:
The idea is to produce a large field gradient between the magnets. When a diamagnetic droplet/particle comes into a contact with the field it produces a small induced magnetic moment directed opposite to the magnetic field. Using strong enough magnets, the interaction of this moment with the magnetic field gradient provides the force which levitates the droplet/particle. Due to the orientation of the magnets the minimum should lie along a line between the magnets.