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In 1866, Erasmus Jacobs found a small brilliant pebble on the banks of the Orange River, on the farm De Kalk leased from local Griquas, near Hopetown, which was his father's farm. He showed the pebble to his father who sold it. The pebble was purchased from Jacobs by Schalk van Niekerk, who later sold it, and turned out to be a 21.25 carat (4.25 g) diamond, known as the Eureka. Three years later Schalk van Niekerk sold another diamond also found in the De Kalk vicinity, the Star of South Africa for £11,200. The second diamond was promptly resold in the London markets for £25,000.

Fleetwood Rawstone's "Red Cap Party" of prospectors on Colesberg Kopje In 1871, an even larger 83.50 carat (16.7 g) diamond was found on the slopes of Colesberg Kopje on the farm Vooruitzigt belonging to the De Beers brothers. Henry Richard Giddy recounted how Esau Damoense (or Damon), the cook for prospector Fleetwood Rawstone's "Red Cap Party", made the discovery on Colesberg Kopje after he was sent there to dig as punishment. Rawstorne took the news to the nearby diggings of the De Beer brothers — his arrival there sparking off the famous "New Rush" which, as historian Brian Roberts puts it, was practically a stampede. Within a month 800 claims were cut into the hillock which were worked frenetically by two to three thousand men. As the land was lowered so the hillock became a mine – in time, the world renownedKimberley Mine.[2] The Cape Colony, Transvaal, Orange Free State and the Griqua leader NikolaasWaterboer all laid claim to the diamond fields.

The Free State Boers in particular wanted the area as it lay inside the natural borders created by Orange and Vaal Rivers. Following the mediation that was overseen by the governor of Natal, the Keate Award went in favour of Waterboer, who placed himself under British protection. Consequently, the territory known as Griqualand West was proclaimed on 27 October 1871. Naming the place: from Vooruitzigt to New Rush toKimberley Colonial Commissioners arrived in New Rush on 17 November 1871, to exercise authority over the territory on behalf of the Cape Governor. Digger objections and minor riots led to Governor Barkly's visit to New Rush in September the following year, when he revealed a plan instead to have Griqualand West proclaimed a Crown Colony. Richard Southey would arrive as Lieutenant-Governor of the intended Crown Colony in January 1873. Months passed however without any sign of the proclamation or of the promised new constitution and provision for representative government.

The delay was in London where Secretary of State for the Colonies, Lord Kimberley, insisted that before electoral divisions could be defined, the places had to receive "decent and intelligible names." His Lordship declined to be in any way connected with such a vulgarism as New Rush and as for the Dutch name, Vooruitzigt … he could neither spell nor pronounce it." The matter was passed to Southey who gave it to his Colonial Secretary J.B. Currey. Roberts writes that "when it came to renaming New Rush, [Currey] proved himself a worthy diplomat. He made quite sure that Lord Kimberley would be able both to spell and pronounce the name of the main electoral division by, as he says, calling it 'after His Lordship'." New Rush became Kimberley, by Proclamation dated 5 July 1873.

Digger sentiment was expressed in an editorial in the Diamond Field newspaper when it stated "we went to sleep in New Rush and waked up inKimberley, and so our dream was gone." Griqualand West was annexed to the Cape Colony by the Griqualand West Annexation Act on 27 July 1877