In the car park of a Rangoon auctioneer, jewellers set out their precious wares as they prepare for the arrival of the rich and powerful buyers.

Hundreds of blocks of rough-hewn jade are laid out for perusal before bidders compete for a gem that is growing in demand throughout the world and helping Burma’s junta get rich.

The Special Gem Auction held in Rangoon this week used to be a yearly event, but with sales higher than ever it is now held every three months.

Posing as a jeweller, a Telegraph reporter was denied entry to the sale room without a formal invitation, but as officials searched for the name there was time to get a good look at the list.

It showed most of the more than 2,000 delegates came from China, Burma’s principal trading partner, but there were also five from Britain and 35 from America. The U.S. jewelry industry has exemption from its country’s trade embargo against Burma for stones that are cut outside the country.

The overseas buyers come in search of not just of jade, but also rubies.

More than 90 per cent of the world’s rubies come from Burma’s mines, and the rare stones are worth more than diamonds. Jade, highly prized in China, is found almost nowhere else. The ground also holds other gems, including sapphires and diamonds.

“The chances are, if you go down any high street in the UK and there are rubies on sale then they are from the regime and the proceeds have been used to repress the people,” says Mark Farmaner, of the Burma Campaign UK.

All mining companies are government joint enterprises. The government is one of the most oppressive in the world, guilty of human rights abuses from razing villages to forced labour. People live in fear of informers and secret police.

But those in favour can make fortunes. Just away from the harbour are luxury modern villas.

Through an open gate two new Ferraris were visible. This is the house of Te Za, a major arms dealer and the junta’s favourite tycoon, who has been granted jade mining concessions in the north of Burma, where whole villages have been displaced to make space for his operations. According to a source, Te Za also has a major interest in Myanmar Gem Enterprises, which organizes the sales for foreign buyers.

Burma’s gem mines are closed to foreign visitors and information is hard to come by. However, in northern Thailand, the Telegraph met two exiles with recent experience of the ruby mines. They described a 26-square-kilometre area where hillsides have been deforested and rivers polluted.

One estimated there are hundreds of thousands of miners. Accidents are common and mines often fall into one another in the sandy ground. “When it collapses they don’t have time to save themselves,” she said.

Some mines pay a daily wage of 87 cents, while others pay miners for what they find.

The mines operate in 12-hour shifts around the clock. A 25-year-old smuggler who grew up in the town claimed: “The bosses mix methamphetamine with the drinking water to give the workers more power. It’s common.”