Rio de Janeiro, Brazil – Rarer than diamonds and more expensive than gold, Paraiba tourmaline has become one of the world’s most precious gemstones for its extraordinary neon blue hues.
First discovered in the impoverished hills of the northeastern Brazilian state of Paraiba in the 1980s, the stone captivated connoisseurs and jewellers with its copper-infused incandescence.
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But with rare treasure comes ruthless prospecting, and now prosecutors in Brazil are close to shining a light on the murky world of illegal gem mining.
A little more than seven years after an investigation began, a whistle-blower has revealed details of an international operation to traffic up to $1bn worth of the jewel from one of Brazil’s poorest corners.
Ranieri Addario, a partner at Parazul Mineracao mining company, told prosecutors in plea-bargain testimony seen by Al Jazeera how his unlicensed firm extracted about 10kg of tourmaline from a mine in the deprived town of Salgadinho between 2013 and 2014 to sell around the world.
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One carat (0.2g) of Paraiba tourmaline, which is favoured by high-end jewellers including Dior, Tiffany and H Stern, is said to fetch up to $10,000, meaning 10kg could be worth as much as $500m.
“What took us aback in this case is that it is a precious stone with a very high value – more expensive than diamonds and gold. So even though it might be a smaller quantity than gold or emeralds, it’s an exorbitant profit. This is what caused the biggest impact,” said Joao Raphael Lima, a prosecutor.
“It is the biggest case of illegal mining that I have had contact with.”
The gang allegedly involved business partners Sebastiao Lourenco Ferreira, Ubiratan Batista de Almeida, and Joao Salvador Martins Vieira, who all had ties to Parazul, their associates, and a network of offshore accounts to fund the illicit trade.
One other investor, Zaheer Azizi, an Afghan national who lives in Thailand, is accused of facilitating the export of the gemstones, is on the run.
He is responsible for several companies around the world, including Azizi Trading Corporations in Peshawar, Pakistan and Azuga Mining Company in Nigeria.
In phone calls intercepted by federal police during the investigation, dubbed Operation Seven Keys, the defendants said the new reserve of Paraiba tourmaline would set them “well in life until the sixth generation of their families”.
Yet despite the riches buried underfoot in Salgadinho, poverty persists above ground where one-quarter of the town earns just $20 a month and one in four are illiterate.
Addario said the operation even drafted in armed military police officers from the neighbouring state of Rio Grande do Norte to secure the mine as the tourmaline was removed. It was then taken around the country to be cut, fraudulently licensed, and sold abroad in Texas, Las Vegas, Hong Kong and Bangkok.
Inspectors from the licensing body, the National Department of Mineral Production (DNPM), said information about the industry was difficult to find, as people in Salgadinho – where the poverty rate is more than 50 percent – were “very afraid” to talk about gem mining with strangers.
Employees of the mining companies were “prohibited from talking about the production of gems”, and the site was said to be under almost constant surveillance.
Addario also revealed how the Parazul shareholders were prepared to pay bribes to the DNPM to have their mine licensed.
Prosecutors said they suspected those involved would turn to a state deputy who held sway over the DNPM to help bypass licensing issues with kickbacks.
Another Paraiba deputy, Joao Henrique de Souza, was also accused of failing to declare profits from mining Paraiba tourmaline but has privileged status as a deputy, which means only the Supreme Court can try him.
De Souza has denied the allegations and said his company, Paraiba Tourmaline Mineracao, adhered to mining regulations.
In May 2015, federal prosecutors charged seven people, including Addario, with illegal mining and money laundering in connection with Operation Seven Keys.
And Addario’s breakthrough evidence has helped widen the inquiry with an additional two suspects now in the frame.
The courts also seized $15m in assets, although the accused reportedly had just $30,000 in accounts in their name.
In his evidence, Addario said he and partner Almeida had sold shares in Parazul to Ferreira, who paid them in luxury cars and cash deposits.
He also named Jose Miranda Costa as bearing the operational costs of the mine in return for exclusive purchasing rights, having bought $400,000 of Paraiba tourmaline from Almeida.
In the meantime, it is suspected that there are other operations that take advantage of the difficulties in regulating the Paraiba tourmaline trade.
The electric blue crystal is found in the host material kaolin, a soft, white, clay-like mineral in mines in remote, rural Paraiba.
“Even if these people had been licensed, any inspections that demonstrated that they mined X amount and declared only 10 percent of this is impossible,” said Lima.
The inability to accurately speculate the quantity of Paraiba tourmaline in a mine has meant that the DNPM had little official data to help the investigation.
And the slow bureaucracy of granting mining concessions has left time for prospectors to profit.
“The government spends years, it could be decades, analysing the request for concessions to mine,” Lima added. “But it’s clear that mining continues during this period without being subject to the requirements of the concessions. The leniency of the government is good for miners.”
While Addario has escaped a seven-year sentence in exchange for house arrest and community service, prosecutors hope his evidence will lead to more convictions.
The two companies involved have been banned from mining by a court order since last year.
“The stones that are displayed at luxurious events for celebrities and international tycoons, which are rented by Hollywood actresses to parade on the Oscar red carpet, should also provide the inhabitants of Sao Jose da Batalha and Salgadinho social progress, enabling better conditions of life, basic fundamental rights for the development of human beings, as proclaimed by the constitution and by international treaties,” Lima said.
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