How is carbon from space converted into diamonds?

Diamonds are made of pure carbon. Diamonds are formed through extremely high pressures, such as formed deep within earths mantle then eventually are pushed up via geological forces for us to find. Another way they are formed are through meteorical impacts and the shock they exert with in carbon rich environments.

It is not just the carbon, all the atoms on earth (and all the matter on other planets and all the matter everywhere) came from space. All the heavy elements came from stars but the hydrogen was created in the "Big Bang" (at least that is what one theory says).

As far as C forming diamond or graphite or any carbon containing compound, that happens through chemistry. If you want to learn more about diamond production, there are industrial companies that produce daimond everyday.

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