Blood DiamondsThe term "Blood Diamonds" is a politically-charged tool meant to cause revulsion and thoughtfulness in anyone who happens to own them. This would be a tactic similar to calling Fur Coats "Slaughter Jackets". However, the term sounds really cool so let's go with it.
Diamonds are very valuable. Artificially so, as anyone who has studied the history of the DeBeers company can tell you, but still incredibly valuable. If you have them, you can make a lot of money selling them, and that's money that can go to plenty of good uses, like luxury homes, kick-ass meals by the finest chefs, and paying for your army to recklessly slaughter thousands of your people.
It's the last use that's a bit of a sticky wicket, as you might imagine. And in countries like Sierra Leone, Liberia and Guinea, where fighting is basically all they do and they've gotten really good at it to the detriment of stability, peace and good will, the ability to bring in money from any source (since their economies are a shambles) is seized upon at any cost. And so there you have it; armies forcing people at below slave wages to extract diamonds from the earth, and these diamonds then being sold through a bunch of different shady middlemen to end up on Madame Gordogato's beautiful bracelet. Like pretty much everything else that depends on some pain down the line (like, say, Chicken Nuggets or Petroleum), the end customer is unaware what happened three months and five countries ago.
Obviously, it is in the best interest of DeBeers and other diamond merchants to keep this unpleasant aspect of things away from the dinner table, and so begins an endless soap opera of accusations, defenses, stonewalling, exposes and all the other fun that happens in a situation like this. Meanwhile, those diamonds are getting sold, people are getting fucked over, and people continue to think putting a nice big rock on a ring means you'll love them forever.
Recently, groups that suck at marketing changed the term to "Conflict Diamonds", which is probably more accurate but about a fifth as evocative. Some people don't know to leave well enough alone.