It is 1999 and Sierra Leone is ravaged by major political unrest. Rebel factions such as the Revolutionary United Front frequently terrorize the countryside, intimidating Mende locals and enslaving many to harvest diamonds, which fund their increasingly successful war effort. One such unfortunate local is fisherman Solomon Vandy (Djimon Hounsou) from Shenge, who has been assigned to a workforce overseen by Captain Poison (David Harewood), a ruthless warlord.
One morning Vandy discovers an enormous pink diamond in the riverbank and buries it in the soft earth. Captain Poison learns of the stone, but before he can follow up, the area is raided by government security forces. Both Vandy and Poison are incarcerated in Freetown, along with Danny Archer (Leonardo DiCaprio), a white Rhodesian gunrunner jailed while trying to smuggle diamonds into Liberia. These were intended for Rudolph van de Kaap (Marius Weyers), a corrupt South African mining executive.
Having managed to learn about the pink diamond, Archer arranges to have Vandy freed from detention. He travels to Cape Town, meeting with his former military contacts, including Colonel Coetzee (Arnold Vosloo), an Afrikaner formerly with the apartheid-era South African Defence Force. Coetzee now freelances with a private military firm. Archer says he wants to recover the diamond and use it to leave the continent forever, but Coetzee counters with his claim, saying his lost stake in Archer's botched Liberian operation entitles him to the diamond as compensation. Archer returns to Sierra Leone, locates Vandy, and offers to help him find his family if he will recover the prized possession.
Meanwhile, RUF insurgents escalate hostilities. Freetown falls to their advance while Vandy's son Dia (Kagiso Kuypers) is among those rounded up to serve as a child soldier under a liberated Captain Poison. Archer and Vandy narrowly escape to Guinea, where they plan to infiltrate Kono with an American journalist, Maddy Bowen (Jennifer Connelly). They will give her inside information on the illicit diamond trade. Coetzee and his private army also turn up in the region, having been contracted by local authorities to repulse the renewed rebel offensive.
While Bowen gets out with her story, the two men set out for Captain Poison's former encampment. Dia, stationed with the RUF garrison there, is confronted, although he refuses to acknowledge his father. Archer radios the site's coordinates to Coetzee, who directs an air strike via an Mi-24 helicopter gunship. Vandy locates Captain Poison and beats him to death with a shovel while mercenaries attack and rout the warlord's surviving men. Coetzee forces a reluctant Vandy to produce the diamond, but is killed by Archer, who realizes Coetzee would have simply killed them both. Dia holds them both briefly at gunpoint, before Vandy renews their bond.
Archer discloses he has been mortally wounded. He entrusts the stone to Vandy, ordering him to take it for his family. Vandy and his son rendezvous with a charter pilot, Nabil (Jimi Mistry), who flies them to safety while Archer makes a final phone call to Maddy Bowen. He asks her to assist Vandy, and gives her consent to publish his revelations of the diamond trade, telling her, "It's a real story now." Maddy is upset when he tells her he cannot come to meet her. As he speaks with her, he looks out onto the sunset, reassuring her. "That's alright. I'm exactly where I'm supposed to be." He presumably dies, still in his African home.
Shortly afterward, Vandy, now living in London, meets with representatives of van de Kaap, who wants to buy his gem. Bowen takes photographs of the deal for publication in her article detailing the trade in conflict gems, and exposes van de Kaap's criminal actions. Vandy appears as a guest speaker at a conference on "blood diamonds" in Kimberley and is met with a standing ovation.
Where does Vandy now live?
London