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February 12, 2005

Mineral Specimen Collecting - Part 2 - Brazil
by Alan Leishman

So you want to be a mine owner ? ....... read on ...

The first part of this series of essays dealt with Silver and Gold.

In part 2 we will now turn to Brazil.

On his second trip to Brazil in 1996 the author considered the idea of starting his own mining operation. The object was to visit as many gem mines and dealers in Minas Gerais as possible in order to do some Due Diligence on the project, and decide whether he should set up a company to buy mineral specimens and gems for resale in Europe, or even to start his own small mining operation.

Now before anyone stops reading in disbelief, or suspects the author is perhaps as crazy as the Mogambo Guru, it should be pointed out that gem mining is different from other types of mining. It is not necessarily as capital and labour intensive as mining for gold and silver or other metals.

"Every Brazilian has the right to prospect and mine gemstones - subject only to purchasing a licence at less than 1 us$. The result is a thriving gemstone industry employing more than 1 million people." - J.R.Sauer 1992

(Compare this to Columbia, where in 1946 the government attempted to pass a law prohibiting private possession of gemstones, which proved totally unenforceable.)

The bottom line is all you need in Brazil, in theory, are a few tools (hammer, chisel and shovel), all the obligatory paperwork and permits, some skill and a bit of luck!

Not necessarily all of these various attributes unfortunately can be claimed by the author, but he was considering investing slightly more capital than the absolute basic minimum.

For example, a typical very low cost mining operation visited, was in operation at Taquaral, where some 50 local Garimpeiros (local independent miners), had divided up a gem bearing area into a dozen or more claims, worked in groups of 2 or 3 alongside each other, mining Tourmaline, and Beryl (photo on the left shows a typical group of garimpeiros).

The "A" team for this private tour consisted of:

Laurindo Rauber: The best guide to the mines of Minais Gerais, fluent in 6 languages, or 7 as he likes to say, if you count latin. His good local contacts, in depth knowledge of the area, and lovely stories of bygone days and ex President Kubitschek contributed greatly to the success of the tour.

John Addison: old friend, international consultant Mineralogist, and world expert on the Asbestos group of minerals.

  From left to right: Remi, the author and Laurindo.

  John Addison working a pegmatite at the Golconda Mine.

Remi Cavegn: An alpine "Strahler/Cristallier", (self collector of minerals in the Swiss alps) from a famous Strahler family, (his Uncle Ambrosi Cavegn is featured in the book "Der Englaender" - describing how Frederic Ashcroft during the 1930's assembled his famous collection of alpine minerals, now in the British Museum). Remi, bilingual in German and his mother tongue Romantsch, picked up Brasileiro (Portoguese with some local words included) relatively easily due to its similarity to Romantsch, (Switzerland's fourth language, spoken in Canton Graubunden).

But first perhaps a few comments on the history of gem mining in Brazil.

In the beginning there were diamonds.

Brazil replaced India in 1725 as the world's largest diamond producer, a role it kept for over 100 years until the deposits were becoming depleted. At this point South Africa took over as the world's number one, following the discovery of diamonds in 1867 and the subsequent development of mining at Kimberley.

Brazil has also experienced Gold rushes, even in recent times. In 1979 Jose Feitosa da Silva found gold at Serra Pelada, 600 kms south of Belem. By April 1980, there were already 6'000 gold seekers, whose numbers rose to 80'000 by 1983, all of them men. Women, weapons and alcohol were forbidden on site by the Garimpeiros. In 1983 14 Tonnes of gold were estimated to have been extracted. Some of the extraordinary images of the miners toiling in the deep pit are reminiscent of the diamond mining at the "big hole" at Kimberley over 100 years earlier.

Brazil is currently more famous however for coloured gemstones, mined from one of the world's largest pegmatite zones, which runs across the state of Minas Gerais.

The principal gemstones include Tourmaline, Topaz, various members of the Beryl group (Emerald, Aquamarine, Morganite, Heliodor), in addition to abundant Quartz, (found in various forms, Smoky Quartz, Amethyst, Citrine, Rose Quartz), and other less well known gem materials such as Kunzite, Chrysoberyl, Euclase, and Brazilianite.

Perhaps the most famous mineral specimens from Brazil are Tourmaline.

Tourmaline is known as the rainbow gemstone because it occurs in all colours of the spectrum and sometimes in party colours, and is in fact a group of 14 different mineral varieties.

Most visitors to Brazil arrive from abroad at Rio de Janeiro, and those interested in gems and jewellery should visit the showrooms and museum of South America's largest dealer, Hans Stern. The museum contains over 1000 faceted Brazilian Tourmaline gem stones, each one with a different colour!

The composition of Tourmaline is sufficiently complex that Ruskin in 1891 described it as "more like a medieval doctor's prescription than the making of a respectable mineral."

The tour commences: From Belo Horizonte, after visiting local dealer Luiz Menezes, we set out by car to the north to visit mines and mineral and gem dealers.

To the authors surprise everybody he visited, and with whom he discussed the possibility of setting up a mining operation reacted very positively. No fear of competition here!

On the contrary any investment of new funds, no matter how small, was welcome in this largely undercapitalised small scale mining sector.

The Director of one larger mining company in Governador Valadares, pulled out a bunch of files from his desk drawer, and asked what did I wish to mine and what size of operation did I have in mind. He explained that their organisation often handled all the paperwork and permitting for small garimpeiro mines in return for a small stake in the proceeds, because that way the garimpeiros could rely on their operations being legal and not risk losing their claims.

From the owner of the Cruzeiro mine the author bought a mine run of Tourmaline that had just arrived in the lab for cleaning and preparation as mineral specimens, (photo on the left).

The buyer who is able to chance upon newly mined high quality material before the next dealer or collector visits the mine, (or dealer) must seize the opportunity and quickly close the deal! The Cruzeiro has produced some of the worlds most beautiful Tourmaline specimens over the years.

David Stanley Epstein author, gem carver, cutter and dealer, whom we met at his offices and workshop in Teofilio Otoni, provided the author with some very sound advice when the discussion turned to the subject of owning your own mine, (photo on the left).

From this and other similar conversations, a gradual consensus emerged.

Of course it was the dream of every serious mineral/gem collector/dealer to have his own mining operation, and no one attempted to advise against the idea.

However an even better idea was to be an "ex mine owner". It looked very good on your Bio (C.V.) together with some photos of the proud owner in his mine. The advantage of the "ex" was that you would no longer be losing money in the mining operation!

It is a well known fact that one of the greatest problems in gem mining is highgrading, i.e. stealing of gem rough material by the miners themselves, or third parties. The owner would have to sleep in the mine and have a 24/7 presence to overcome this tragic common weakness in human nature. There are many anecdotal tales from various countries of mine owners even buying back stolen material from their mines in order to secure high quality specimens. (For example see the Golconda Mine story below).

David was very helpful and informative, and to anyone interested in gem dealing, his excellent book, "The Gem Merchant" listed in the references below is highly recommended.

Teofilo Otoni This town lying at the centre of the Minas Gerais gem mining, cutting and dealing trade is amazing in its reputation of possessing some 15'000 gem dealers in its modest population. There are literally hundreds of beryl (Aquamarine) prospects close to the town, some with small scale mining operations.

On opening the car door on arrival in T.O., the first dealer magically materialised from out of the blue and immediately started offering us paper packets of cut gem stones. Ten minutes later there were 10 dealers, and since a crowd attracts a crowd, after 1 hour we were surrounded by more than a hundred dealers. They remained as our permanent entourage for the 2 days we spent there, even forming a queue outside our hotel during the night, or so it seemed when we were breakfasting. In order to sleep we asked the reception to block all telephone calls to our rooms to prevent the more aggressive dealers from trying to telephone us during the night.

One insistent dealer who followed the author for two days trying to sell a 500 ct faceted smoky quartz finally obtained his sympathy and a purchase was made, more with the intent of obtaining some peace and quiet than genuine interest in the object itself. Imagine the author's dismay when the dealer immediately pulled a second similar stone from his pocket and recommenced his incessant sales pitch all over again.

The surrealism of the setting in a central park in downtown TO was increased when one of the hundred or so dealers shinned up a tree, and came down carrying a sloth, which in turn had a baby sloth clinging to it. This was certainly an original sales promotion aid which the author had not come across before. These amazing animals not only appear to move in slow motion, but also have a slowed down metabolism enabling them to stay perched in the canopy eating leaves before climbing down once a week or so to meticuously perform their toilet operations.

Buying gems in a situation like this presents several problems of which the most serious are;

• restoring some kind of order to enable concentration on a "one deal at a time" basis.
• testing the authenticity of the gems without access to laboratory test equipment to avoid purchasing synthetic or glass/paste or other fraudulent substitutes.

Empirically we struggled to improvise solutions to address these problems, and by the time we reached the picturesque town of Ouro Preto where a similar gem street market exists, we had adopted the following methodology.

• Lacking a refractometer or polariscope to test the gems, one very useful method in circumstances like this is to use "Visual Optics - The Hodgkinson Method". By holding a cut gem stone close to the eye, ( with the table cut face closest to the eye) and regarding a single light source, one can observe several properties of the gem. The author greatly regretted not having studied and experimented with V.O. in much greater depth, when he had been introduced to it by his friend Alan Hodgkinson, one of Scotland's leading gemmologists.
• John Addison succeeded in using polaroid sunglasses to simulate a polariscope for testing the stones as an additional "scientific" aid in our hour of need.
• Crowd control was established by installing ourselves on a terrace (good sunlight for gem quality assessment) and admitting the dealers one at a time to offer their packets of gems. It was hoped that on observing the polaroid testing, the dealers might be less encouraged to offer fake glass/paste gems.

Note: It is beyond the intended scope of this essay to enter into the scientific aspects of gem testing, but anyone interested in this subject is pointed to the literature on Gemmology listed below.

John Addison comments on Ouro Preto.

Ouro Preto: This is one of the oldest Portugese towns in Brazil, a World Heritage site in its own right and well worth a visit for that alone. The 16^th century churches and houses, cobbled streets and fascinating museum add to the delights of a thriving gem and mineral centre. The main gemstone of the area is Topaz, with the wonderful honey-coloured imperial topaz and the rarer, more precious, pink/purple varieties both produced from local mines. Most of the mining is open-cast, with square claim pits being dug into the hematite iron ore that is the source rock for the crystals. The larger mines are now pretty much industrialised, but many are still operated by small groups of locals, and from them you can buy rough stones and crystals at attractive prices, and they were happy to let us do a bit of 'specking', (i.e. wandering about aimlessly looking to see if they have missed any crystals in the ore: they didn't).

The town has many gem and mineral shops with a vast array of good specimen minerals as well as faceted gems from all over Brazil, and they are keen to do business: haggling is a must. So keen are they that one dealer, having failed to make a sale at the start of our trip, was happy to come down to Belo Horizonte at the end of the trip to continue negotiations. He succeeded and Remi filled a suitcase with fine Indicolite and Rubellite specimens.

The old town square was the place to go for the smaller dealers, hundreds of them, each one more desperate than the last to make a trade, and with every gemstone type that can be imagined, from the exquisite electric blue Paraiba Tourmalines to the 25 cent amethyst crystals 500 at a time.

Nothing could have been more pleasant in this lovely old town than wandering the streets after dusk when it seemed like the whole population was out for a stroll, a meal, a small drink, and a chance to meet friends, relatives, girlfriends, boyfriends or even some of the strange gringos that were in town to buy stones."

Golconda Mine: The amazing portal seen in this photo appears to evidence the local mining practice of following the veins or rock structure to extract only the minerals of value.

The Golconda has had various owners in its illustrious history, but during our visit it was owned by the late Ailton Rodrigues Barbosa.

Peter Bancroft reports "In 1962 an offshoot pegmatite of the Golconda produced 1 Tonne of gem quality emerald green Tourmaline, and led to an invasion of miners onto the property. In the melee that followed three miners were killed, a number wounded, and the invasion repulsed. But the police staying on to prevent further hostilities, got an illegal share of the mines production....Mine owners noticed prostitutes in local bars vending some of the best crystals. Thereafter each Monday a representative of the owners would visit the prostitutes and buy back gems the girls had received for their services over the weekend."

(Author's Note: This is just one of scores of anecdotal mining historical stories in Peter Bancroft's "Gem and Crystal Treasures", now sadly out of print, but perhaps available using the link below in the Literature list.)

The oft related story of Barbosa's find of a large pocket of Tourmaline near the Joao Pinto mine in 1978 is legendary. The "Bamboo Pocket" yielded 4 Tonnes of gem and mineral specimens. The largest Tourmaline pictured here, named the "Rocket" was valued at several million us$.

With his share of the proceeds, Barbosa later took over and invested in the Golconda mine, which had produced good Tourmaline, quarz and Beryl back in the 1960's.

Ailton took us on a tour of the Golconda during our visit (photo below).

While waiting to hit the next gem zone in the mine, he was mining some of the surrounding gangue, (feldspar) and selling material for industrial purposes in order to try and cover his costs.

(Author's note: The almost totally unpredictable aspect of gem mining is a major problem: where is the next gem pocket to be found in the mine, and will it be found before the operation runs out of funds?

John Addison's note: The garimpeiros claimed to be able to detect hidden gem pockets by clicking their tongues and listening for the echo from deep within the walls of the tunnels: we have no way of verifying this but they were adamant that it was so)

Morro Redondo Mine now consists of 2 mines a few kilometres apart. The older of the 2 contains a large excavated chamber resembling the interior of a large church, which had been christened "Banco do Brazil" because of the quantity and quality of the Tourmaline which had been mined there, and the fortune the operators had made in the process. The newer mine was now the focus of the operations, and was being mined professionally with equipment including bulldozers, diesel generators, and other capital equipment. Following blasting, gem quality rough green Tourmaline, Rubellite, the red tourmaline, and Indicolite, the blue one and Morganite (pink Beryl) were being extracted. Unfortunately the miners use of pneumatic hammers destroyed any chance of obtaining any good quality crystals for mineral specimens, their operation being solely targeted on obtaining gem rough for faceting.

Several women scoured the dumps for small bicolour attractive Tourmaline crystals, while their husbands worked in the mining operation (photo on the left).

NovaEra emerald mine, Capoeirana, (discovered 1988 and mined by up to 800 garimpeiros)

The mine foreman with his large black beard resembled the portraits one sees of the famous Portuguese Navigators of the 15/16 th century.

We were thrilled when he asked us whether we would like to go down the mine!

That is until we saw that this involved being lowered by a winch 60 metres down a concrete shaft. In the spirit of adventure we proceeded. After putting a harness around our legs and waist we were lowered, two at a time down the shaft.

The accompanying garimpeiro's job was to push us off the shaft walls, and at the bottom, which was flooded, to swing us into an adit (tunnel). Safely installed in the adit, we unconnected the harness and crawled some 50 metres or so to the working face of the mine. Unfortunately they were not working at a productive point in the mine, so we saw no emeralds, but were able to admire the geology. Unlike the other gemstones of Minas Gerais which are found in pegmatites, the Emerald of Nova Era occurs in biotite schist, a metamorphic rock.

Safely back on the surface, we were surrounded by miners and their families who were keen to sell us a few cut emeralds, plus the children who were selling chips and fragments of emeralds they had collected on the dumps.

Note: Brazilian Emeralds, which contain Vanadium instead of Chromium as the green colouring agent in the Beryl, were only recognized in 1963 as true emeralds, thanks to the efforts of Jules Sauer in obtaining the verification from the Gemmological Institute of America. (GIA)

(Photo on the left : Nova Era Mine).

Aquamarine mines. We visited one of the many locations around Aracui, where garimpeiros were mining Aquamarine.

Remi descended into the mine with a garimpeiro, climbing down wooden ladders to an earth ledge, then more ladders and ledges until they disappeared with their acetylene miners lamps into the bowels of the earth. An hour later Remi reappeared, but at first was silent when we asked him if he had found anything interesting. However the reason for this soon became apparent as he started to spit out crystals and chips of Aquamarine rough which he had put into his mouth for safety while using both hands to climb the ladders!

We then enjoyed a churrasco style barbecue cooked on an open fire at the mine site, the meat served with Manioc flour, and washed down with local beer. Note: Many restaurants in Brazil also specialise in Churrasco, where up to 30 different types and cuts of meat are offered for a price of approx US$ 10.- .(Note: Prices may well have increased since our visit.)

"Zero" cost mining: The success of the typical garimpeiro type mining operations relies on eliminating costs. This is necessitated by the absence of savings or capital for investment by the miners. Necessity being the mother of invention, they survive by finding no cost practical solutions to supply all their needs.

 • Explosives are made by filling plastic bottles with fertiliser, and adding a cap and fuse.

 • Chisels and other metal tools are sharpened in a self constructed blacksmith operation, using home made charcoal and a bicycle wheel converted into a bellows! (photo left).

 • Their housing consists of huts made out of branches cut from the surrounding trees. Spaces left between the branches and careful selection of the building site provide the necessary air conditioning to cope with the heat. Note: A site on top of a small hill provides the necessary breezes to achieve the desired effect.

 • Food is more plentiful and available all the year round in the tropics and sub tropics than in northern territories. At one mine we observed ripe mangoes falling from the tree every minute or so and a "free range" pig feeding on the fallen fruit (photo below).

 • Warm clothing is not essential in a climate where shorts and sandals are more suitable in coping with the hot climate.

However, the other side of the coin is that despite their success in being able to operate a mine with virtually no capital costs, the Garimpeiros normally are lacking access to all the other facilities, which are now taken for granted in the northern hemisphere, such as medical and dentist treatment, safety equipment, training and procedures, and insurances, simply because they cannot afford them. This is the dark side of the equation which sadly may well take one or more generations to change for the better.

After finishing the tour of the mines of Minas Gerais, the author flew north to relax for a week in Salvador, Bahia, a fascinating city of over 2 million inhabitants, of whom 90% originated from Africa during the slave trade of the 19 th century.

The highlight of this visit was a live open air concert in the city centre by Olodum a band consisting in its full size of 300 drummers, plus other instruments, and a different vocalist for nearly every number. Everyone in Salvador danced in the street to the incredible beat of the drums right through the night, enjoying an occasional Caipirinha the famous cocktail made from cachaça.

Conclusions

1. The faceted gem market in Minas Gerais centered in Teofilo Otoni suffered from over supply and insufficient demand resulting in low prices.

1. The quality of faceting of cut gemstones was often moderate except for larger more expensive stones.
2. Mining costs had to remain very low in this market environment for an operation to survive.
3. Mining of good quality mineral specimens or gem rough material was a haphazard rather than a scientific process.
4. Exceptions were rare sought after gems with very high faceted prices such as Emeralds, Alexandrite, and Paraiba Tourmaline. Security usually surfaced as a problem at localities when the faceted price/ct of the material being mined rose to several hundred us$/ct.

Surprisingly, the authors decision not to become a minerals and gem dealer, or to open his own mine, was based not on any of the above criteria, but instead on logistics and communications problems.

Flights between Europe and Brazil are long and not inexpensive. Jet lag is a problem.

Emails were in their infancy in 1996, and fax connections did not work properly either.

Thus it was that the author regrettably decided not to go commercial, but to remain a hobby collector of minerals and gems.

The same decision, if taken today, might have been different due to improved communications and the internet, but alas the years have passed and age is now the decisive factor in remaining a collector.

New specimen mining techniques such as ground radar, detailed mapping and other geophysical methods may help to locate the elusive gem material and change the odds slightly in the miners favour, but to date gem mining is still a high risk operation.

So the authors desire to become a mine owner remains where it started; .... by purchasing shares on the PM junior mining markets in Toronto, Vancouver and elsewhere.

But he still has great pleasure on the occasional field trip to an exciting location, which allows him to swing a hammer once again and hopefully uncover another beautiful mineral specimen!

Epilogue: Of course Brazil has also some of the most beautiful women in the world, who take your breath away at first sight;...... but unfortunately this aspect might be considered "Off topic", and might restrict the circulation of this essay.

Well maybe this is a subject for another essay on another day on another website?

Literature

"The Tourmaline Group" - R.V.Dietrich

"Emeralds around the World" - J.R.Sauer

"Brasilien Paradies der Edelsteine" - JR Sauer

"The Gem Merchant - How to be one, how to deal with one" - David Stanley Epstein

"Serra Pelada" - Das Gold und die Hoffnung - Peter Frey / Romeo Rey

"Gem & Crystal Treasures" - Peter Bancroft

"Visual Optics" Diamond and Gem Identification without instruments - Alan Hodgkinson, F.G.A.

Gemmology - Peter G. Read

Gemmologists's Compendium - Robert Webster - revised by E. Alan Jobbins

Photos - Brazil
John Addison

The author would also like to thank John Addison for reviewing and contributing to the text of this essay.

Alan Leishman
Alan Leishman Blog

Disclaimer: Alan Leishman is not a registered Investment Advisor or a Broker/Dealer. Readers are advised that the information contained herein is issued solely for information purposes and is not constructed as an offer to sell or the solicitation of an offer to buy. The opinions and analysis included herein are based from sources believed to be reliable and in good faith but no representation or warranty, expressed or implied is made as to their accuracy, completeness or correctness.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report should be independently verified with the companies mentioned.

Copyright © 2004 - 2005 Alan Leishman

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