Diamonds are formed deep within the earth under heat and pressure over millions of years. Carbon is an ingredient that is essential to the formation of diamond. However, the carbon must be free of organic impurities, which will not create jewelry grade rough diamonds. In addition to the carbon, intense heat and pressure come together under the surface of the earth's mantle to create natural diamonds. While coal is also made of carbon, it contains lots of other impurities that make it impossible from diamonds to form out of coal.