Diamond is heavy, in a wet environment you can separate it from almost anything else, including rock particles with a liquid cyclone.
All you need is cups with a softer material like brass which will carry the diamond to act as a lap while it abrades the rock surface, with spiral face grooves to allow liquid flow across the surface form outside to centre and then you recycle the Diamond and some liquid to feed in to the top of the system, your Diamond is then only scrap when it becomes too fine to recover.