There three factors required to create diamond are carbon, heat and pressure.
Carbon is found in plenty in atmosphere as CO2, as oil in Earth crust and is produced at a by-product of volcanic eruption. CO2 is absorbed by plants in the sea and on land and is turned into wood and other compounds that when burnt produces charcoal and graphite. Living creatures are mostly maid of carbon which is the foundation of life on Earth. When life started on Earth in the sea, the organism filled the oceans and their remains rested and accumulated on sea floors as sediments. The continental plate movement melted and compressed these sediments under the Earth crust. This process provided the conditions needed for formation of diamonds. Since colliding continental plates also create volcanos and mountains, the buried diamonds are move up to surface and ejected out of the volcanos, so natural diamonds are always found in the areas around volcanos.
