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Gem dealers push to ban Myanmar rubies

BANGKOK, Thailand - The rich red hue of Myanmar's prized rubies is a reminder to many gem dealers of the military government's bloody crackdown on democracy advocates, and talk of a boycott is increasing.

'There is a growing awareness that it is a fascist regime,' said Brian Leber, a third generation American gem dealer.

'Considering what this regime has done to its own people, we're troubled to see that a precious stone is offering such a great source of cash for them,' he said in a telephone interview from the Chicago suburb of Western Springs, Ill.

'Trade in these stones supports human rights abuses,' New York-based Human Rights Watch said in a statement this week. 'The sale of these gems gives Burma's military rulers quick cash to stay in power.' Myanmar is also called Burma.

But a successful boycott of what activists call 'blood rubies' will prove difficult. More than 1,500 people from more than 20 countries registered for a gems auction that opened Wednesday, despite the boycott calls. While some rubies are exported legally, many also are smuggled out of Myanmar.

The ruby trade puts money in the junta's pocket, since it controls mining concessions, but the scale of the profit is hard to assess. Secrecy shrouds both the gem trade and the country as a whole.

In 1964, Myanmar introduced an annual gem auction, and starting in 1992 the sale was held twice a year. In more recent times, a special third auction has been held each year.

First lady Laura Bush issued a statement Friday calling for a boycott of the event by the gem industry and urging consumers to reject any stone from Myanmar.

'These funds prop up the regime, allowing it to continue to harass, arrest and sentence peaceful activists who seek freedom of speech, worship and assembly,' she said. 'Every Burmese stone bought, cut, polished and sold sustains an illegitimate, repressive regime.'

The government has taken other steps to increase earnings, including an effort to cut smuggling. The country's New Gemstone Law, enacted in 1995, allows people in Myanmar to mine, produce, transport and sell finished gems and jewelry at home and abroad - as long as they pay tax, which smugglers don't.

Most rubies are trafficked as rough stones. They are dug out of mountainsides in the Mogok and Mong Hsu areas of northeast Myanmar. From there, they are carried on a long, perilous journey over mountains, through jungles and insurgent-prone areas, changing hands several times on their way to Thailand.

There, the rough stones are heat-treated with chemicals at high temperature for long periods to bring out the brilliant color and clear away small cracks.

Once cooked, cut and polished, the gems are sold to foreign wholesalers, who distribute them to jewelers around the world.

The biggest determiner of the final price is the success of the heat enhancement. If done improperly, the process can split a stone and make it almost worthless; done right, a ruby can become more expensive per carat than a diamond.

The best large stones fetch millions of dollars. The Christie's auction house, on its Web site, lists a ring set with an 8.62 carat ruby, which sold for $3.6 million - a record per carat price of $425,000 - in February 2006.

The vast majority, however, are stones of up to 2 carats, which miners in Myanmar sell for just a few dollars. They end up in jewelry shops with price tags ranging from a few hundred to several thousand dollars.