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Harrison Church discovered coal near the Hams Fork River in 1868. He gathered financial backing from a group in Minneapolis, and they formed the Hams Fork River Coal Company. Diamondville was built to house the miners, and the town was incorporated in 1896.

The town was named for the superior-grade coal that came from the local mines. The coal resembled black diamonds.

See also Miners Memorial Park and Diamondville Mining History.