India was the chief source of diamonds up to 18th century A.D. and produced many historically celebrated diamonds such as the Koh-i-Noor, the Great Mogul, the Pitt Regent, the Orloff, the Nizam, the Hope etc. The diamond industry, though perhaps dates back to 2nd / 3rd century B.C., flourished mostly during 13th –17th centuries A.D. with production of diamonds mainly from the mines located in the Krishna - Penner Valleys in modern Telangana & Andhra Pradesh states.
The alluvial diamond deposits along the Penner River, between Jammalamadugu and the Chennur-Kanuparthi-Kondapeta belt, have been known from ancient times; however no systematic studies were carried for placer diamonds in the modern era. The ancient diamond mining activity in this area has been reported by many eminent workers. The known primary source rocks in the catchment of Penner River are the kimberlites of the Wajrakarur Kimberlite Field (WKF) occurring either as pipes or dykelike bodies, are found emplaced into the granite-greenstone terrain to the west of the Cuddapah Basin. These kimberlite bodies are mostly linear and irregular shaped indicating near root level erosion of the pipe rocks. Most of the pipes are weathered to give rise to yellow ground at surface whereas hardebank (fresh rock) varieties are not uncommon. The top inverted ‘carrot’ part of the kimberlite pipes are all eroded and the diamonds carried by them have been dispersed in the fluvial system of the Penner River, perhaps enriching the gravel carried by them.
Reconnoitery Geological Surveys through detailed PGRS studies, geophysical line traverses, sedimentological studies and detailed drainage morphometric analysis of the area resulted in the identification of hidden gravel bed 50 cm beneath the soil cover from the surface in Obulampally village. Test pitting were carried by utilizing ground geophysical data 318 tonnes of bulk sample was processed at Wajrakarur Diamond Processing Plant which yielded two numbers of ‘Gem Quality’ diamond of 0.45 carat weight and 0.15 carat weight, thereby proving the diamondiferous nature of the Penner River gravels.