Diamonds have been valued throughout history because they are difficult to find and mine and because of their beauty. Diamonds were first thought to be mined in India and were used as religious icons which made them valuable. According to Wikipedia:

Most natural diamonds are formed at high-pressure high-temperature conditions existing at depths of 140 to 190 kilometers (87 to 120 mi) in the Earth mantle. Carbon-containing minerals provide the carbon source, and the growth occurs over periods from 1 billion to 3.3 billion years, which respectively corresponds to roughly 25% and 75% of the age of the Earth.

Today, synthetic diamonds can be almost passed on as real and it is advisable to make sure you purchase certified diamonds.

One of the biggest diamonds in the world is the Cullinan diamond. Nine stones were cut from this diamond resulting in one of the cuts, the Cullinan I, pear shaped diamond weighing 530.20 carats. The diamond was discovered in 1905 by Frederick Wells, a superintendent at the Premier Mine in South Africa. He discovered it while making a routine inspection 18 feet below the surface of the earth. A shiny object caught his attention. The rough diamond weight 3106 carats (1 1/2 pounds). It was named after Sir Thomas Cullnian. The diamond was sold to the Transvaal government who in turn gave it to King Edward VII on his 66th birthday in 1907. The stone was cut in Amsterdam and produced nine large gems, 96 smaller diamonds and 9.5 carats that went unpolished. The nine large stones are still in the possession of the British Royal Family.

Although diamonds are beautiful, they are only rocks!