We're talking bruising here, but just shy of breaking bones kicking. And yes, high quality diamonds, blood diamond standard. The harder you kick, the bigger the diamond. We're getting to broken bones if you're not careful, and you don't want a dead diamond-pooping cat, so you'll have to be very careful with how you manage that, should you opt to get kicking. And it is only this cat that has this ability. It's a rather unique cat.

EDIT: A brief discussion with my colleagues and I've now edited this to include the idea that harder kicks will produce bigger diamonds.