There is more than one theory as to how and when diamonds were created. We'll use one.

Let's go back back...to the beginnings of time...when the earth was young. We're talking about 70 million to 150 million years ago. It was the beginning of the continental drift...that time in history when the earth began to break up, and Africa and South America separated, and the Atlantic Ocean was formed. It was then, during the creation of the Atlantic Ocean, that violent volcanic activity created enough heat and pressure to create diamonds. How much heat and pressure? Well, we're talking about 7000kg/cm2 and 3,630 degrees Fahrenheit. (2000 degrees Centigrade) The only place on this planet of ours where that kind of heat and pressure can be achieved is roughly 120 miles deep into the earth. Sometimes, very rarely, a heavy meteorite hits the planet with enough heat and pressure to create diamonds. But this is a very rare occurrence. As the earth changed and shifted, diamonds slowly began to find their way to the surface...a great deal of the time via the eruptions of volcanoes. The name of the rock formed by these volcanoes is called Kimberlite...and much of it is found in South Africa...today's heart of the diamond producing mines of the world.

We now shoot forward through the mists of time. No one knows exactly when man discovered diamonds. What we do know, however, is that from the beginnings of ancient times, when man first discovered diamonds, to the middle of the eighteenth century, India was the world's only supplier. There was a king in India around the years 320 to 298 B.C. His name was Chandragupa. It was during his reign that documentation was revealed that proved that not only were diamonds known in the fourth century B.C., but they were also used as commodities for trade. It was sometime in the eighteenth century, Brazil entered the arena and became a major force in the production of diamonds.

Diamonds are mentioned in the times of Alexander the Great. They appear in the stories of the Thousand and One Nights with Sinbad the Sailor, and later, in the stories written about Marco Polo.
Today, the Diamond Syndicates of South Africa control world diamond production.