Brazilian diamonds today are well-known and pretty. But in the days of exploration, mercantilism, and colonialism, diamonds were known only to come from India. The discovery of diamonds in Brazil was shocking, and since then, the history of Brazil's gemstone trade, especially diamonds, has been wrought with conspiracy and crime.
Early reports of diamonds were inconsistent from European explorers. Some weren't sure if they had found diamonds or some other stone. By the 1730s, however, many diamond reports were verified, and it was announced that there were indeed precious diamonds in Brazil. This was a significant discovery because India was the primary source of all diamonds in Europe for many centuries. Diamond exports from Brazil boomed in the following years. The Portuguese monopolized the mines to keep supply down and tried to restrict exports, but smuggling and piracy only served to fill in the gap. London, for instance, was one of the rough diamond capitals of the world. There were extensive efforts to restrict these Brazilian diamonds by foreign powers, mainly to preserve economic interests related to the Indian diamond trade. One common tactic was to publish reports that negatively described the quality of Brazilian Diamonds. This resulted in a price drop and threatened Portuguese enterprising. However, the Portuguese were cunning and sent some of the diamonds to India, where their merchants would sell them to intrigued buyers, passing them off as authentic Indian stones.
More objective observers were quick to note that Brazilian diamonds were hardly different from Indian diamonds. A jeweler named David Jeffries noted this in his treatise. However, because it was reported that Brazilian diamond prices fell due to rumors, it's not likely his report had much of an impact. Even in the early 1800s, more than seventy years after the discovery of diamonds in Brazil became widely known, it was reported that there were "few jewelers" who believed Indian and Brazilian diamonds were of the same quality.
Early profits were rather good, especially compared to the cost. Millions of carats could be mined up a year. Not every diamond was found through extensive mining efforts, however. Through the use of slaves, merchants could get smaller but still profitable diamonds through searches. Rivers, creeks, mud holes, canals, and sand were dug up or filtered through to find diamonds. Slaves would, and often did, take diamonds and sold them. To motivate slaves to hand over diamonds they unearthed, some merchants offered manumission; if a slave found any diamond worth 17.5 carats or more, he would be released, offered wages, and given clothes. If a diamond worth 8 or more carats was found, they would be given clothes and a knife. This didn't stop theft, and slaves would often be beaten and/or had iron bands fastened around their throats.
In 1822, Brazil earned its independence, and with that, Portuguese influence ended. Brazil operated on a free exploitation system, but its diamond production plummeted in the 1880s. Once slavery was abolished, there was no reliable source of cheap labor, and South Africa began to compete with Brazilian diamonds. The tragedy is that by the late 1800s, Brazilian diamonds became renowned for their beauty when the prices dropped. Many economists and jewelers knew that the output of carats was far too low to make up for it. The Brazilian diamond mining trade was seemingly reduced to marginal profits and run by artisans and individuals relatively quickly. Brazil didn't lose much income over this, however. Investors merely shifted capital to coffee and sugar, which were just as profitable, if not more, than diamonds. From 1870 onward, Brazil's coffee exports were thriving, and it was shipping millions of bags a year to countries around the world, chiefly the United Kingdom.
The early 1900s gave some hope to the diamond industry of Brazil. Competition with South Africa had long challenged Brazilian hegemony from the mid-1700s to the 1880s. The appreciation of Brazilian diamond clarity had become popular, and the diamond industry began to grow again. By the mid 20th century, Brazil continued to produce a high quantity of diamonds, but South Africa, Cuba, and even Canada became strong competitors. This was especially true for industrial use, with thousands of carats being exported for that alone. Despite that brief Brazilian resurgence, its production had been eclipsed by other sources. An estimate from the Jeweler's Circle commented on the pessimistic outlook for Brazilian diamonds, pointing out that output dropped by more than 50% from 1947 to 1948. It also estimated the production of various diamond exporters. The Congo produced the most at 9 million carats, and South Africa took second place at just over 1.2 million carats. Brazil by comparison, churned out a meager 250k carats. Brazil was once a towering giant in the trade of diamonds but was now reduced to a secondary exporter of diamonds.
Brazil continued to invest more and more into agriculture, primarily coffee, but fruits (especially bananas). As a result, diamonds continued to fall by the wayside, and its export capacity seemed to stagnate if not decrease at times. There was one consistent saving grace for the diamond industry (save for private buyers), and that was the carbonado. Carbonados are black, rough diamonds used in industry. It's also important to point out that Diamonds was the leading mining industry that stagnated. Other mines flourished, such as iron and manganese.
The USSR had been producing and exporting diamonds since the early 70s and dwarfed its competitors over a few decades. Starting off with several million carats, the USSR had jumped to the top and competed with the traditional giants of the diamond trade. By the late 80s, it had increased substantially. With the dissolution of the USSR, there was a minor decrease in the early 90s, but the country was still producing more diamonds than it was in the 70s. At the dawn of the 21st century, Russia was producing over 20 million carats of diamond annually. A boom nearly doubled output in the mid-2000s, and since then, Russia has remained the leading producer of diamonds at a whopping 40 million carats. By comparison, Brazil has gradually reduced its diamond output, and it fluctuates considerably. In 2016, Brazil produced 183k carats, but in 2018 produced 250k carats. It isn't likely that Brazil will ever outpace any major exporter or producer of diamonds again. Still, it has rightfully earned its place in the trade's history and stood out for being a notable producer rivaling India in the mid 18th century.
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