Rapaport Magazine

Treasure of Douradinho

Brazil’s diamond diggers are facing a changing environment

By Shawn Blore
RAPAPORT...  He’s got thighs as lean and stringy as discount-meat-bin drumsticks, cheeks grizzled gray with stubble and gums that flap like old Walter Houston in “The Treasure of the Sierra Madre.” Ten hours a day, from just after sunup to just before sundown, he stands as he is now, bent over, calf-deep in water churned a mud-puddle brown, ropey old arms twisting a ponderous layer cake of three wire-mesh sieves, with a heavy dollop of earth and gravel for filling.

His name is José de Oliveira, and he’s a garimpeiro, derived from grimpas da serra, which, in Portuguese, literally translates as “one who scratches the mountains.” The term was first coined in the 1720s by a haughty Portuguese viceroy to describe the men who lit out beyond the boundaries of royal authority to seek their fortune mining Brazil’s high and inaccessible sierra.

Three vigorous twists with his forearms, a pause and then de Oliveira pulls off the top-layer sieve, full of a dozen large bits of gravel that he tosses out of his pit with hardly a backward glance. Back into the puddle and a few more twists, and the rocks in the second-layer sieve get a similar, peremptory toss.
Bending back to his task, de Oliveira gently stirs the round pan still submerged in the milky-brown muck, then comes up with his last sieve, full of bright, shiny pebbles no bigger than lentil seeds. These he carefully flips over onto a growing pile of similar stones, then picks up a rough wooden spatula and smoothes them over, once, then twice, then a third time for luck. It’s not gold his old fingers are searching for in the little pile of glistening quartz and garnet. It’s diamonds.

A Find

Diamonds are here, in the bright red earth surrounding the city of Coromandel in western Minas Gerais, a traditional mining state in central Brazil. An 81-carat pink, plucked from a river bed in 1999 by garimpeiros working for the Campos brothers, Minas Gerais-based diamond traders, sold for something close to $18 million a few years later. A 139-carat sparkling clear beauty emerged like Venus on the half shell not six miles from this spot in mid-2007. It sold locally for $2.6 million, then vanished abroad. Local rumor has it pegged as the rough that gave rise to the 39.34-carat cushion cut gem sold at auction at Christie’s in April 2008 for $6.8 million.

De Oliveira has been working his current spot, a 2,500-acre garimpo, or mine site, called Douradinho, approximately six miles outside the city of Coromandel, for something close to six months. So far, he has only a single 1.08-carat diamond, which he sold for $295, to show for all his labors. He’s not discouraged, however. He’s not even unhappy.

“This keeps me busy,” says the 64-year-old, taking a break to gulp some water and talk to a nosy stranger. “Too old to work with cows anymore. Joints can’t take it. But you have to have work. Do nothing and you go nuts.”

“You’re already crazy, old man,” says another garimpeiro, a younger man named Nivaldo Pereira who has stopped by for a midmorning cigarette break. He, too, has been working this area for a good six months, without finding so much as a chibuizinho, or tiny gem. In contrast to de Oliveira, he’s somewhat less sanguine.

“No one likes work,” says Pereira, flicking cigarette ash in the direction of his own washing pit, one of a battery of four or five on the other side of a small rise. “No one. You do it for the money.”


Though they appear, both of them, as brave and independent loners, in fact, de Oliveira and Pereira and garimpeiros like them are actually the cutting edge of small consortia. Behind every miner, there is a backer who pays the miner a minimum wage, currently $250 per month. In return for his investment, the backer gets a half share of any diamonds found, once all the other percentages have been deducted.

Those percentages begin with the owner of the land on which de Oliveira is digging, who gets a 15 percent share. Officially and legally, the subsurface rights holder is also entitled to some percentage, but as subsurface rights holders in most parts of Brazil rarely show up to enforce their claims, no one bothers about this much. In the case of Douradinho, the subsurface rights holder has officially waived his claims. The man who sets up and runs the pumps that provide de Oliveira with the water he uses to wash his gravel also gets a 6 percent share. That leaves 79 percent, which de Oliveira and his backer split 50 — 50, or, rather, 39.5 percent — 39.5 percent.

Pereira’s consortium is more complex still. In addition to the 15 percent to the landowner, Pereira pays 3 percent to his water supplier, plus a 35 percent share to a man with a backhoe who digs out the dirt and gravel ore and deposits it by Pereira’s washing pit. More stubborn, de Oliveira digs his dirt by hand. Pereira says this arrangement lets him wash more gravel and potentially find more diamonds, though the backhoe fees mean his own percentage — assuming he ever finds anything — drops to only 25 percent.

These percentages are time-honored. No one ever thinks to cheat, nor did either man have trouble finding a backer. Coromandel has a long history with diamonds, and doesn’t lack investors willing to try their luck supporting a miner or two, in hopes of that 100-carat payoff.
What is new is the 1 percent share that both men owe from their own pockets to the new garimpeiro cooperative, which obtained the mining permissions plus all the other legal and environmental permits now required by state government agencies for this garimpo, where approximately 60 garimpeiros ply their trade.

Changing Times

All this regulation is a bit of a departure for Brazil’s garimpeiros. In the colonial era, garimpeiros were considered semi-outlaws, but the crown’s reach was limited to towns and cities, leaving garimpeiros largely free to do what they would in the remote jungle and countryside. During Brazil’s military dictatorship from 1964 to 1985, the generals actively encouraged garimpeiros, seeing them as sons of the pioneers, and a good way to reinforce Brazilian sovereignty in lightly populated parts of the interior.

In recent years, however, the tide has turned against Brazil’s garimpeiros. The federal Department of National Mineral Production (DNMP) disapproves of their increasing use of mechanized earth-moving and ore-processing equipment. The state and federal environment agencies dislike the holes they say garimpeiros leave in the landscape and the discharge they claim
garimpeiros pump into streams and rivers.

In late 2006, the Minas Gerais public prosecutor’s office launched a series of raids across the western third of the state, targeting in particular the small raft dredges, used to harvest diamonds on the riverbed, that suck up ore through long, deep hoses, then spit the discharge back into the river.

Raft mining is no more in Minas Gerais. The small-scale mechanized garimpeiros working on land have had to adapt, filing environmental impact assessments, refilling old excavations with discarded tailings and running discharged water through a series of settling ponds before returning it to the river.

Not even de Oliveira’s small unmechanized mine site has escaped the new regime. Down in the swale beyond Pereira’s washing pit, there stands a tiny new forest in waiting, multiple ranks and files of little green tree seedlings, newly planted in earth and gravel that was shoveled into what used to be a great, deep diamond hole.

Some garimpeiros, of course, have had a hard time adapting to the brave new world of paperwork and impact assessments. In time-honored tradition, many of them have set out for the frontier, taking up mining in Amazon states like Mato Grosso and Rondonia, where regulations are observed most often in the breach, or crossing the northern borders into Venezuela and Guyana.

In Douradinho, Pereira finishes his cigarette, flicks butt to earth and stalks reluctantly back in the direction of his washing pit. De Oliveira fits his three-screen sieve back together, sinks it to the bottom of his mud-puddle washing pit, shovels two spadefuls of rock and earth onto the top screen and bends back to washing for diamonds.

Article from the Rapaport Magazine - August 2008. To subscribe click here.

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