African countries with significant natural wealth have often reaped limited rewards and have experienced underdevelopment, corruption, political instability, and in some cases, violent conflict. As a result, the so-called ‘resource curse’ hypothesis has received much attention in recent years. It has been suggested that diamonds played a key role in fuelling the brutal civil war in Sierra Leone during the 1990s, an issue that has given rise to a significant literature on ‘blood diamonds’. However, as Sierra Leone emerges from a decade of destruction, field-based research undertaken in the Eastern Province suggests that diamonds could actually provide an important impetus for post-war reconstruction. Following a review of the ‘resource curse’ literature and its relevance to Sierra Leone, two important initiatives in the country’s diamond economy are then examined: the Kimberley Process Certification Scheme (KPCS) and the Diamond Area Community Development Fund (DACDF). The paper argues that whilst such initiatives are undoubtedly significant steps in addressing a number of key issues, such strategies need to be managed carefully and future policies must be based on a detailed understanding of relationships between diamond mining and broader development strategies and priorities.