The Burmese junta began an auction of gem stones yesterday which could raise pounds 150 million of “desperately needed” currency for the regime.

Burma produces more than 90 per cent of the world’s rubies, almost all jade – which is highly prized in China – and is also abundant in sapphires and other jewels. The industry is closely controlled by the generals and their cronies.

The army sometimes confiscates the best gems, and the best mining sites, and uses forced labour to work them. In recent years, the regime has increased the frequency of the sales which provide Burma’s third greatest source of hard currency, after natural gas and teak.

“The mere fact that this is the fifth auction [this year] shows the junta is really desperate for money,” said Aung Naing Oo, a Burmese analyst exiled in Thailand.

Many coloured stones originate in Burma and are cut in third countries such as Thailand and India. Neither Europe or America currently bans imports of Burmese gems. The last gem sale in Rangoon, in July, was attended by five British jewellers.

Paulo Sergio Pinheiro, the United Nations human rights envoy, is on his first visit to Burma in four years, but that did not deter the regime from arresting three activists in Rangoon yesterday. Su Su Nway, a 35-year-old woman activist who had been on the run since August, was captured on Tuesday.

The Irrawaddy Magazine, published by exiled journalists, reported yesterday that a monk called Gambira, who helped lead September’s protests, was arrested on Nov 4. “There is no going back. It matters little if my life or the lives of colleagues should be sacrificed on this journey. Others will fill our sandals, and more will join and follow,” Gambira wrote in a Washington Post article.

Amnesty International claims that 700 people are being held over the pro-democracy demonstrations that gripped the country last month. The junta claims there are only 91.