In the beginning there was a craton and it was good. Cratons are the oldest, thickest, and most stable parts of the Earth's crust.
Occasionally, ultra hot and violently quick magmatic intrusions force their way through these cratons forming, among other things, kimberlite and lamproite pipes.
Diamond-bearing kimberlite pipes tend to be deep and carrot shaped. The largest crystals are found in kimberlite, like the Cullinan which came out of the Premier Mine in South Africa in 1905.
Kimberlite is usually mined in the open pit style until the depth makes it cost prohibitive to bring ore out of the pit. The Premier Mine, renamed Cullinan for it's 100th birthday, can be seen from space.
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If the pipe is rich enough, mining will continue underground. Cross section of an underground mining operation:
Kimberlite yields the highest percentage of gem quality crystals at up to 20% of the diamond rough recovered. One tonne of ore produces up to, but usyally less than, one carat of gem quality material.
Lampriote pipes form a bit more explosively, creating a wider deposit, and bear smaller diamonds. The Argyle Mine in Australia and the diamond fields in Arkansas are examples of lampriote intrusions. The Argyle Mine:
The Argyle mine produces about 6 carats of diamond rough per tonne of ore, but only 5% of that is gem quality. The balance is fairly evenly split between the tiny brownish diamonds used in low end jewelry and material suitable for industrial applications.
Kimberlite and lamproite pipes are primary deposits. Next week: secondary deposits.