Diamond is a rarer allotrope of carbon, it is very expensive and very sought after. Diamonds although rare occur naturally. They are mined in South Africa and Brazil. They have also been found in metorites hitting
the Earth. It is also possible to make Diamonds synthetically, in fact in Bristol University's School of Chemistry Department there is a research group that do just that.
Diamond is the ultimate gemstone, having few weaknesses and many strengths. It is well known that Diamond is the hardest substance found in nature, but few people realize that Diamond is four times harder than the next hardest natural mineral, corundum (sapphire and ruby). But even as hard as it is, it is not impervious. Diamond has four directions of cleavage, meaning that if it receives a sharp blow in one of these directions it will cleave, or split. A skilled diamond setter and/or jeweler will prevent any of these directions from being in a position to be struck while mounted in a jewelry piece.
As a gemstone, Diamond's single flaw (perfect cleavage) is far outdistanced by the sum of its positive qualities. It has a broad color range, high refraction, high dispersion or fire, very low reactivity to chemicals, rarity, and of course, extreme hardness and durability. 
In terms of it's physical properties, diamond is the ultimate mineral in several ways: 
- Hardness: Diamond is a perfect "10", defining the top of the hardness scale. 
- Clarity: Diamond is transparent over a larger range of wavelengths (from the ultraviolet into the far infrared) than is any other substance 
- Thermal Conductivity: Diamond conducts heat better than anything - five times better than the second best element, Silver! 
- Melting Point: Diamond has the highest melting point (3820 degrees Kelvin)! 
- Lattice Density: The atoms of Diamond are packed closer together than are the atoms of any other substance! 

Graphite is the stable form of carbon. In fact, all diamonds at or near the surface of the Earth are currently undergoing a transformation into Graphite. This reaction, fortunately, is extremely slow. 

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