Brazil is the second country (after India) in which diamonds were found (that happened in 1725). In these early years Brazil was still very much behind India, but as the Indian diamonds dried up, Brazil took the first place throughout the 19th century leading the world diamond production till 1870.
The most famous diamond found in Brazil is "Star of the South," a 254 carat stone that was found in 1854. Brazilian diamonds occur usually in alluvial deposits that were created by Diamantiferous sands and gravel called "cascalho" or "cascalhão".
Brazilian diamond industry is mostly connected with these two states: Matto Grosso and Bahia and these two diamond rich states should also provide future diamond findings as Brazilian diamond industry still looks very strong despite relatively early discovery of diamonds.
Brazil's currently holding 10th place in the world with total annual production in 2005 of about 700,000 carats.