DECLINE OF DIAMOND PRODUCTION IN BRAZIL, AFTER THE ADOPTION OF THE KIMBERLEY PROCESS CERTIFICATE SYSTEM – KPCS.

Abstract

The study seeks to identify the causes of the collapse of production of rough diamonds in Brazil. Diamonds are one of the most perennial mineral commodities produced and marketed by Brazil. With reserves of around 13.8 million carats (cts) they currently contribute with only 0.04% of the total world production. Before the creation of the KPCS, Brazil produced an average of 900,000 cts/year; corresponding to 0.57% of the current global production. It is estimated that during the period of validity of the KPCS the possible loss accumulated in Brazilian production was 8.7 million cts, reaching values of more than US$ 2.0 billion. Among the reasons for this drop are that the Brazilian production comes from deposits of secondary origin, geographically dispersed, many without proper legal registration. Today, the various sectors that integrate the global diamond Industry employs, directly or indirectly, 10 million people and accounts for more than US$ 74 billion/year. In Brazil all sector activities were virtually paralyzed.