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Diamonds can be found in levels below 16, but when it comes to limited mining, a 3-by-1 tunnel can be done on levels 10,11, and 12 for a maximum number of diamonds. Level 12 has the highest chance of spawning.
However on my maps I've found that diamonds frequently appear in 1x1 or 1x2 deposits and might be missed by 3 or more spacing, so I use a spacing of 2. Iron appears with equal likelihood from layer 5 up to sea level.