a simplified geological cross section of a kimberlite pipe. Kimberlites are formed by molten rock ascending from depths as great as 150 km, where high pressure and temperature squash carbon into diamonds. The kimberlites ascend at the speed of a race horse through ancient rock fractures (tectonic faults), carrying diamonds with them. They erupt explosively, producing the typical carrot-shaped cross section. No one knows what causes the eruptions, but without them there would be no diamonds.
(from reference #1, see box below left)