As noted in comments, this is headlinese, with the usual compression and omitted words that is common in the style.
The structure is
South Africans(subject) are(aux verb) demanding(participle, forming present continuous) ...(object)
The object is a content clause (aka nominal clause, ie a clause acting like a noun), these are often marked with a subordinator "that", but it has been omitted in this case. The structure of the content clause is:
'worlds largest diamond' (subject, by marking it in quotes it means "the thing that is called the world largest diamond, even if this isn't literally true") is (aux verb) returned (past participle, forming passive voice).
This content clause could have used the subjunctive "be returned". But in modern British English, that isn't required.
Finally there is a prepositional phrase which is supplemental to the content clause "from (prepostion) The Queen's crown jewels (object)"