BRAZIL DIAMOND MINING
A recent surge of interest in the Canadian diamond industry has meant that companies mining for gems in other parts of the world have fallen off investors’ radar a bit. However, that’s not to say such companies have faded away. Companies like Brazil Minerals, located near the Jequitinhonha River of North-East Brazil, are one of the largest in Brazil, and in a recent October 2014 article by Diamond Investment News, this large diamond mine was put to the spotlight as one of the front-runners in the diamond world.
When asked about the recent fancy-color grading by GIA, however, Chairman and CEO of Brazil Minerals, Marc Fogassa, only had this to say: “Probably not the first one found, but the first one graded. The Jequitinhonha River is mostly colorless, so it’s very exciting. We’re studying the colored diamond market, and in our press release on that diamond I mentioned the jewelry potential for colored diamonds.” That being said, the colored diamond market is growing at an exponential rate, and when investors are looking for the right business to invest in, it is important to look at all the facts and what each mine has to offer the market, as well as what they hope to accomplish in it. Although the state of Piaus where Brazil Minerals is located contains an abundant source of minerals, there are other areas in Brazil that are yielding a plethora of colored diamonds. One of these areas is Minas Gerais, and after the discovery of one of the rarest diamonds in the world, The Ocean Paradise, this region has been the talk of the gemological world.
The Ocean Paradise is one of the rarest and most coveted diamonds in the world, and is the second, and one of the only, natural diamonds known to the GIA that possesses a blue-green hue (the first being the Ocean Dream Diamond).
When discovered, the Ocean Paradise measured 6.43 carats, and after polishing was sold at a 1.6-carat weight. Minas Gerais diamonds are relatively small (7 to 8 carats), of a very beautiful quality, and often colored blue-white, yellow, and red. Minas Gerais’ counterpoint, Mato Grosso, produces diamonds as well, but of a worse quality than that of Minas Gerais. Mato Grosso’s crystals, often called “carbonado”, have an irregular shape, are generally elongated, and often contain a tinted, value-degrading faint yellow and brown color. Along the Amazonian Cráton to the north, and the San Francisco Cráton in Minas Gerais, alluvial deposits in Brazil were created by diamantiferous material being transported from its primary source, within kimberlite intrusions. This area near the city of Diamantina produced more than 100,000 carats of diamonds per year, and more than 30% of these diamonds are gem quality. Brazil has several alluvial diamond sources, where stones are mined from the sands and gravels of riverbanks. There are also some potentially important diamond pipes that may warrant larger-scale open-pit or underground mining. Minas Gerais is famous for its gold and colored gemstones, as well as other commercial minerals.
Mines near the city of Coromandel in Minas Gerais are known for large stones with high clarity that are brown or colorless to near colorless. Mines along Minas Gerais’ Abaeté River mostly contain smaller diamonds, but they have produced some large top-quality pinks. Important stones mined near Coromandel include a 263-carat rough diamond that yielded two 70-carat pear shapes, both H-color. Coromandel also produced a 140-carat rough that yielded a 10-carat E-color and a 56-carat H-color diamond, both with high clarity. Although the Abaeté River is the better-known source for pink diamonds, Coromandel has also produced some specimens, including a 21-carat Fancy Intense pink rough crystal.
A 26-carat crystal mined near the Abaeté River recently yielded a 12.60-carat Fancy Intense purplish pink cushion, as well as a 7-carat rough diamond that produced a 4.24-carat Vivid pink. Colorless stones from these types of mines weigh 10 carats or less, and it is believed that the Abaeté River has supplied some of the most important pink to red diamonds to come on the market in the last 50 years. The entire length of the river has considerable diamond potential, and it is predicted to produce high quality colored and colorless diamonds for at least another 200 years. Most of the Abaeté River is an alluvial deposit area with diamond-bearing gravel. This entails small open-pit operations in which excavators remove the gravel all the way down to the bedrock and load it into trucks for careful examination. Because diamonds are denser than most other materials in the gravel, depressions indicate where valuable concentrations might be found. Once an area is mined down to the bedrock, operations continue by following the alluvial gravel along the riverbed.
Trucks then haul the diamond-bearing gravel to a processing (or washing) plant, where diamonds are separated from the gravels and other minerals, often referred to as overburden. The processing plant uses a feeder to bring the gravel into an automated system. There it is washed with a water cannon before separation. A vibrating screen then removes coarse material, and sluices transport the remaining gravel to a worker who washes it by hand while a sorter sifts through the material looking for the occasional diamond. Efforts to restore areas damaged by open-pit mining include formal plans to refill the mined pits, and follow guidelines set forth by an environmental impact study. Besides rare colored and colorless diamonds, Minas Gerais is arguably one of the most famous localities for tourmalines in the world as well, and yields a wide variety of styles and colors annually. The Minas Gerais District in Brazil is well known for brilliant tourmalines, and has produced multi-million dollar world-class specimens, as well as many more affordable pieces. Not only are tourmalines prevalent in this area, but calcites, amethysts, sphenes, childrenite, topaz, andalusite, chrysoberyl, herderite, brazilianite, monazite, morganite, milarite, eosphorite, goshenite, cassiterite, heliodor, albite, zanazzite, clevelandite, and other common and rare fine minerals can be found abundantly. In order to better understand the Brazilian mining industry as a whole, it is important to know the history of this diamond haven, and the recent discoveries that are causing gemologists to rethink its potential in the market. After a two thousand year run, India’s Golconda diamond mines were nearly depleted by the early 1700’s. Fortunately, a new find in the Portuguese colony of Brazil helped to re-invigorate the European diamond trade. To obtain a mining concession from the Portuguese government at that time, a gold deposit was required to cover any future taxes that would be levied on production. The tax, known as the “Royal Fifth,” was a hefty 20 percent, based on the value of expected proceeds from the mine. During this period, Brazil was able to produce somewhere between 50,000 and 250,000 carats of rough diamonds per year. For more than a hundred years, Brazil became the world’s most important diamond source, as the famous Golconda deposit in India was nearly exhausted and South African mines were yet to be discovered.
Brazil was the principal diamond producer of the world for over 150 years, until it was later surpassed by South African production. The precious stones were initially discovered in Minas Gerais near Diamantina in 1714, however, 1729 has been known as the official “discovery year” when the notice eventually reached Europe. Diamond mining in Brazil continues today, though largely overshadowed by the output of other countries. But despite sporadic production, important stones continue to emerge from Brazil. Because of the discovery of diamonds in alluvial gravels of the Abaeté and other rivers in the mid-18th century, garimpeiros (artisan diggers) migrated towards the West to a region called the Triângulo Mineiro. In the 19th century, scientists provided the first geological descriptions of the region. In the 20th century, they were attracted back to the region by the geology of its diamonds, and tried to explain their genesis, depositional environment, and regional geological setting. When mining began in Brazil, diamantiferous sands and gravel called cascalho, or cascalhão, were hand-dug from river ledges and beds, scooped out of the river bottom by divers, also known as “escafandro”, or dug from hillsides (engrunada or gruta). Then the diamond-bearing alluvium was washed in sluices of running water, washed again in wooden basins called faísca or lavagem, and finally picked through by hand. The cascalhão occurs in high riverbank ledges, with a combination of gravel and sand, but river-bottom gravel deposits typically lay beneath a bed of clay and silt. At first, Brazilian diamonds were not as desirable as their Indian counterparts, and the first few years of mining yielded smaller-sized stones. As the supply of Indian diamonds dried up, however, Brazilian stones gained in popularity. By the mid 1700’s, Brazilian diamonds were flooding the European market, and prices fell precipitously, but this was reversed as Brazilian supplies began to dry up in the early 1800’s. For over 250 years, the Triângulo Mineiro supplied a major amount of Brazil’s diamonds. Surprisingly, almost all diamonds over 100 carats came from this region. By the 1960’s almost all major diamond companies came to the Triângulo Mineiro to explore the primary diamond sources. After over half a century of extensive investigation, they have abandoned further exploration and left the region to small mining firms and garimpeiros. Although much of the exploration data remains proprietary, they have revealed the discovery of hundreds of kimberlites and related intrusive bodies in the region. Nevertheless, the primary diamond source remains an enigma to this day. The most recent discoveries in the field have caused researchers to look closely at both the gravel in these areas, as well as the areas typically worked at by native garimpeiros. In the 1960’s, near Mato Grosso’s capital of Diamantino, the “Mato Grosso Diamond Project” (a 63,000-hectare claim block) created a diamond-rush to the area. To date, more than 50 kimberlite pipes have been located, many of which are the most likely source for the region’s historic alluvial deposits. In 1999, nearly 3,000 itinerant miners (diamond diggers, or garimpeiros) illegally entered the protected Cinta Larga (“broad belt”) Indian reservation to mine for diamonds.
The Cinta Larga reservation lies between the states of Rondônia and Mato Grosso, along the Bolivian boarder. Mining was forbidden within the ‘Roosevelt Reservation’ in order to preserve the indigenous Cinta Larga people’s homeland, but the Cinta Larga are allowed to engage in small-scale prospecting called garimpagem, if the labor is done exclusively by indigenous Indians. Federal Police evicted the garimpeiros, but the government estimates that as much as $50 million worth of illegally mined diamonds were smuggled to Belgium. The Cinta Larga attacked a group of illegal prospectors in April of 2004, killing 41 of them. Since the incident, tensions in the region have eased, and in October 2004, Brazil received accreditation to obtain a Certificate of the Kimberley Process. Diamond mining within the Roosevelt Reservation could be worth an estimated $3.5 billion annually. Diamonds have been washed in the Triângulo Mineiro since their discovery from “cascalhos” (river gravels). This source remained the only one till the end of the 19th century, when garimpeiros started to wash these rivers as well, but with no significant economic importance.
Through extensive research conducted in the area, the quantity of diamonds washed through river gravels in the last 250 years in the Minas Gerais is not compatible with the relatively shallow erosion level of mined kimberlites (igneous rocks containing diamonds within the Earth’s mantle). It is estimated that 40 million carats have been recovered from river gravels in the area since 1992. Compared to similar circumstances in South Africa, the mined kimberlites in the Triângulo Mineiro should only yield about 8 million tons, a number that is not consistent with the kimberlite volume expected. Moreover, if these and other kimberlites are so extremely rich in diamonds, why did all major mining companies leave this region? More extensive research is currently underway, and although it seems understandable why past miners would have abandoned mining in Brazil, considering the limited, and now outdated, knowledge about how diamonds are formed, and the other, seemingly more abundant, areas that have come to fruition in recent years, gemologists and diamond connoisseurs everywhere are rethinking their prior opinions about mining prospects in Brazil. How this is possible is still unknown, but it’s seemingly quite clear that Brazil contains more opportunities than originally thought, and there is no better time to capitalize on those opportunities than in the present day.