IRL coal is not pure carbon, so it should be purified and turned into graphite first, then 4 graphite blocks can be compressed into a diamond.
The purification should be a complicated process too: a consequence of 5, or probably even more, cycles of cooking and compressing, starting from coal dust and gaining non-useful intermediate products on each stage. The stages should be lossy, giving 3 pieces of n+1 level product from 4 pieces of n level product, so a lot of coal would be needed to make only one diamond, for the sake of keeping the game balance.
IRL coal is not pure carbon, so it should be purified and turned into graphite first, then 4 graphite blocks can be compressed into a diamond.
The purification should be a complicated process too: a consequence of 5, or probably even more, cycles of cooking and compressing, starting from coal dust and gaining non-useful intermediate products on each stage. The stages should be lossy, giving 3 pieces of n+1 level product from 4 pieces of n level product, so a lot of coal would be needed to make only one diamond, for the sake of keeping the game balance.