A diamond-fueled deluge
In the early 1720s, gold miners, or garimpeiros, panning rivers near Arraial do Tijuco (modern-day Diamantina) kept finding unusually bright stones. These were initially dismissed as curious crystals. The official announcement of a massive diamond discovery came in 1729, unleashing a rush that would reshape the colonial economy. For the next 150 years, this region of Minas Gerais became the world's largest supplier of diamonds, surpassing the mines of India.
The sheer volume of stones unearthed by a workforce composed primarily of enslaved Africans was so great it threatened to devalue diamonds on the European market. The Portuguese Crown reacted with alarm. To prevent a price collapse, it imposed strict controls, including a temporary outright ban on mining between 1734 and 1740. This attempt to manufacture scarcity was a direct response to an overwhelming natural abundance, an unusual problem for any monarchy.
The Diamond District
To manage the diamond fields, Portugal established the Intendência dos Diamantes (Intendancy of Diamonds) in 1734. This body held absolute authority over a specially demarcated territory called the Diamond District. The Intendancy's regulations were codified in a document known as the "Livro da Capa Verde" or Green Cover Book, which detailed severe punishments for any infractions.
Life within the district was tightly controlled. No one could enter, leave, or conduct business without the Intendant's permission. All mining was a royal monopoly. Initially, the Crown leased extraction rights to private contractors, the first being João Fernandes de Oliveira. In 1771, this system was replaced by the Real Extração (Royal Extraction), putting mining under direct state control to maximize revenue and stop leaks. The entire system depended on the forced labor of thousands of enslaved people from Africa, who worked the riverbeds under brutal conditions. An estimated 1.7 million enslaved Africans were brought to Brazil between 1700 and 1800 to work in mining and agriculture.
The geography of the Serra do Espinhaço, a rugged mountain range, was a source of wealth and a challenge to control. This terrain of steep valleys and winding rivers that held the diamonds also provided cover for those who sought to bypass the Crown's monopoly. Smuggling became rampant. Diamonds were hidden and transported along clandestine paths, often extensions of the official Estrada Real (Royal Road). One such route, paved by enslaved laborers to transport official goods, became known as the Caminho dos Escravos (Slaves' Path) and was also used for contraband. This illegal trade network created a powerful parallel economy, defying Portugal's attempts to dominate the global diamond market.