A Diamond is Created
The formation of a diamond is a precise matter. There are only two locations in which molecular conditions allow for the creation of diamonds: the area of the earth's lithospeheric mantle below relatively stale continental plates and the site of a meteorite strike. In these places, carbon bearing materials are exposed to high pressure, but the temperature remains relatively low.
Deep inside the earth, at least 90 to 120 miles down, is where diamonds are formed. This depth is subject to change, because different geographic areas have a different rate of temperature change relative to depth. For example, under oceanic continental plates, temperatures will rise more quickly as you dig deeper. The thickest, most stable and oldest parts of the earth's continental plates, is where you can find the right combination of temperature and pressure for diamonds. In these parts of the earth, cratons, or lithosphere regions are found. Cratons (Greek from "strength") range from 500 million to 2 billion years old. The more time diamond crystals spend in the cratons, the larger the diamond eventually becomes.
The smallest of diamonds, called mircrodiamonds or nanodiamonds, have been found within impact craters, the result of meteors striking the earth. This event, which is characterized high pressure and low temperature settings, is the second instance that may form a diamond. Scientists believe that the meteor's impact is what creates these specific conditions necessary for creating these small diamonds.