Syngenetic garnet of eclogitic/pyroxenitic composition included in a polycrystalline diamond aggregate from the Venetia kimberlite, Limpopo Belt, South Africa shows multiple inclusions of spherules consisting of 61 ± 5 vol% Fe3C (cohenite), 30 ± 2 vol% Fe-Ni and 9 ± 3 vol% FeS (troilite). Troilite forms shells around the native iron-cohenite assemblage, implying that both compositions were immiscible melts and were trapped rapidly by the silicate. It is proposed that this polycrystalline diamond-silicate-metallic spherule assemblage formed in very local pressure and fO2 conditions in cracks at the base of the subcratonic lithosphere from a C-H-O fluid that reacted with surrounding silicate at about 1,300-1,400 °C. In a mantle fluid consisting of CH4 > H2O > H2 near fO2 = IW, the H2 activity increases rapidly when carbon from the fluid is consumed by diamond precipitation, driving the oxygen fugacity of the system to lower values along the diamond saturation curve. Water from the fluid induces melting of surrounding silicate material, and hydrogen reduces metals in the silicate melt, reflected by an unusually low Ni content of the garnet. The carbon isotopic composition of δ13C = -13.69‰ (PDB) and the lack of nitrogen as an impurity is consistent with formation of the diamond from non-biogenic methane, whereas δ18O = 7.4‰ (SMOW) of the garnet implies derivation of the silicate from subduction-related material. Hence, very localized and transient reducing conditions within the subcratonic lithosphere can be created by this process and do not necessarily call for involvement of fluids derived from subducted material of biogenic origin.