Diamond mining in the rural highlands of Lesotho has taken different forms over the past century: unregulated diamond digging by locals and “migrant” diggers in the early 1950s; regulated diamond mining by a state-sponsored diamond cooperative from 1978 onwards; and a commercial diamond mining company from 1996 onwards. This paper examines the rise and fall of the Liqhobong Diamond Mine Cooperative in Lesotho's rural highlands in the Butha-Buthe district according to the human economy approach. It is based on ethnographic research undertaken from May 2013 to January 2014. It focuses on the impact that the diamond cooperative had on social divisions and livelihood strategies within Liqhobong and how this changed when the cooperative was taken over by a multinational company. The paper shows that the fall of the cooperative was the result of government issuing private claims to investors, thus undermining artisanal diamond miners by incorporating and managing their pace and ultimately throwing them off. The paper demonstrates how the state uses and legitimises its power to mute and suppress artisanal diamond diggers.