"Years ago, the land here was full of [gem]stones, but now there's not much left," Olan says.

"Look at the sapphire up there in the picture on the wall," he continues. "That came from my sister's mine. I bought it from her, heated and cut it, and sold it on for five million baht [HK$1.2 million]. It was so beautiful that, before I sold it, I got a photographer to take a picture for me so I can always remember what it looked like."

The same image proudly sits at the top of his business card. With the money he made from the rubies and sapphires he found hidden in the red dirt he was able to send his daughters to university in New Zealand.

Olan's story mimics those of many families in and around Khao Phloi Waen.

Visit Chanthaburi during the week and you'll find a typical, quaint Thai provincial town nestling among rolling hills bearing fruits of every description.

Look closer, however, and you will notice clues to a more exceptional existence. In a convenience store, a rack of brightly coloured gemstone necklaces stands next to the cash register; a hairdresser's salon has a table full of small plastic boxes containing shiny stones of all colours; the street lights on a bridge are the shape of perfectly cut rubies and give off a red glow in the evening.

At the weekend, Chanthaburi comes alive. The bustling gemstone market takes over several blocks of nondescript concrete shophouses and hundreds of tables covered with tiny colourful gemstones spill out onto the street. Behind them sit traders from all over the world, from Pakistan and Germany to Sri Lanka and Japan, all competing to buy gemstones at the best possible price.

Behind one long table is a line of men from Peshawar, in north Pakistan. Each has a piece of paper taped to the table in front of him with the name in Thai script of the gemstones he wants to buy and simple drawings of the cuts he is looking for.

Jamil Hussain, 30, is relatively new to the business. He used to sell carpets but his merchandise dried up when the Afghan craftsmen, who had been living in Pakistan during the Taliban's rule in their homeland, returned to Afghanistan after the American invasion. An entrepreneur, Hussain shifted his focus to gemstones.

Self-taught and now in his sixth year of business, he shuttles between Chanthaburi and Peshawar, buying stones for his jeweller clients back home. The annual fee for his table on the gem market's main drag, which he shares with six other Pakistani buyers, is 75,000 baht.

Despite a decline in demand for gems in Pakistan - due to security problems in the north of the country and the withdrawal of the United States Army in Afghanistan (Hussain says American soldiers buying gems for their wives were some of his best clients) - "profit is still very good [if you] buy stones here", Hussain says, as he sifts through a pile of tiny cut gems that have just been dumped in front of him by a Thai seller.

The extent of the gem trade's influence on the town can be seen in a collaborative project between Chanthaburi Boonkumkrong Stone Factory Group (CBS) and the local prison. CBS is a wholesaler and manufacturer of blue and black sapphires sourced from across the globe and brought to Chanthaburi to be heated and cut - and it's the prisoners who do the cutting.

CBS' owner, Phaiboon Pimla, 51, came up with the idea of employing prisoners when he himself was in jail, serving a seven-year sentence for drug dealing. Hailing from a Chanthaburi gemstone family, he had tried to pay off a gambling debt by selling marijuana and amphetamines, he says.

Phaiboon knew all too well the tedium of prison life and became aware of the difficulties inmates faced after their release.

"There are many prisoners who are very intelligent and skilful, especially in the arts. They just lacked opportunities in life and that's why they got arrested," he says, in the immaculate home that doubles as his office.

Now in its third year, the project employs some 80 male and 30 female prisoners, who were trained by Phaiboon and now spend their days polishing sapphires for his company. The money they earn is paid monthly to the prison and, upon release, the prisoners are given the full amount.

"It's impossible that there won't be stones stolen [by the convicts], but it's only a very small amount that goes missing because we have put such a good system in place," he says.

rubies and sapphires, have been mined in Chanthaburi for centuries. But the industry didn't take off until the 1850s, when an agreement between the British, who controlled Burma, and the Thais allowed Burmese traders to cross Thailand en route to Indochina. The Burmese were considerably more knowledgeable about gemstones than their neighbours, so when they discovered Chanthaburi, many settled here and began mining.

Even so, it took until the early 1960s for the gemstone industry in Chanthaburi to switch into high gear. In 1962, Burmese politician and military commander Ne Win took power from the British and closed Burma to the world for the best part of 40 years. Trade embargoes placed on the junta made conducting business difficult and risky.

Cut off from Burma's supply of pigeon's blood rubies - stones of the finest quality - traders sought out an alternative, and thus began the golden age of Chanthaburi. For the next 30 years, it supplied 95 per cent of the world's rubies and a large proportion of its sapphires.

US gemologist Richard W. Hughes, a long-time resident of Thailand, first ventured to Chanthaburi in 1979. Having just completed his studies at Bangkok's Asian Institute of Gemological Sciences, he came to witness first-hand the extent of mining and trading in the area. It was to be the beginning of a lifetime of fascination with the town. Hughes went on to write several books and hundreds of articles on the subject, and became one of the world's foremost experts on rubies and sapphires. Last year, the Association Francaise de Gemmologie named him one of the 50 most important figures to have shaped the history of gems since antiquity.

In 1996, however, the rubies ran out. After three decades of intensive, uncontrolled and industrialised mining, the deposits were exhausted. Some sapphires remain but, those, too, are in limited supply.

"As the rough gems started running out, the traders began to travel the world looking for supplies," Hughes says, as we sit among the high-power microscopes and computers at his recently opened Bangkok laboratory, Lotus Gemology. Here, clients can have their gemstones tested for authenticity and determine whether the stones have been treated.

As early as the 60s, small numbers of Thai traders had begun to travel overseas in search of alternative sources of rubies and sapphires. By the mid-90s, they were heading out in droves.

Five years ago, a Chanthaburi native known as DJ became a permanent resident of Pemba, a port city in Mozambique.

"I decided to stay there with a [Mozambique] passport because they have the rubies," he explains, while sitting in a trader's shop having just returned with more than US$1 million worth of rough rubies and other gemstones he bought on behalf of clients.

"About 200 to 300 Thais now live permanently across Mozambique," he says. "They're all involved in gem trading."

The travelling Thai traders were willing to buy anything. Quality didn't matter, because they had a trick up their sleeve that would send ripples through the gemstone world.

an Arab trader who visited Sri Lanka wrote about how the local people would treat rubies with fire and a blowpipe; one of the earliest examples of the heat-treatment process.

Fast-forward 600 years and 19th-century France was making major advances in chemistry. And it is here that the first synthetic gemstones were manufactured. By applying enough heat at a controlled level, French chemist Auguste Verneuil was able to fuse together tiny pieces of ruby. The resulting stones would become known as Geneva rubies.

After 1902, when this discovery was made public, many people involved in the gem industry across Europe started to experiment. It was like the alchemists' dream but instead of turning lead to gold, poor-quality rubies were transformed into things of beauty. Confronted with ethical issues, the whole process was undertaken secretively.

The sudden boom in Chanthaburi's gem heat-treating practices is generally agreed to have started in the early 60s, around the time Burma shut its doors and the Thai town became the world's leading supplier.

But exactly how those methods caught on here is still debated.

According to many locals, a fire broke out in a Chanthaburi gem-cutting factory. When the inferno was finally extinguished, after several days, the owner went to retrieve his rubies from the safe, only to find them brighter and more beautiful than before. Word spread and soon everyone in Chanthaburi was heat-treating their stones.

Another theory revolves around the son of a gem dealer from Pailin, a province in Cambodia close to the Thai border, who worked as an apprentice to a gemstone cutter in Switzerland. The cutter, being part of the Geneva-ruby revolution, was secretly experimenting with the new commercial heat-treatment process and making his own Geneva rubies. After a few years, the young Cambodian returned to Pailin, bringing with him the knowledge he had acquired in Switzerland and, by the 60s, the secret had spread as far as Chanthaburi.

Whatever the catalyst, says Hughes, "some time in the 1960s, the secret started to leak out and, by the 1970s, many Thais had left for Sri Lanka, to buy 'rough' rubies. But you can't take a piece of an otherwise worthless rough [gemstone] and turn it into a gem by using the blowpipe technique. With high-temperature heating you can.

"From that point on, things exploded."

During the mid-90s, with no rubies and few sapphires left in their own plots, Thai traders began migrating in droves. But now they were interested in other types of gemstones, such as tanzanite and garnet, which they brought back to Chanthaburi to experiment on. The market in Chanthaburi developed and, with the Thais now interested in all sorts of gemstones, traders from Africa and elsewhere in Asia began to bring in more rough stones.

This is when Chanthaburi truly became the international gemstone trading hub it is today.

is the son of a Chanthaburi market dealer. Educated in Australia and having spent many years in the US, Ponpoj had no intention of going into the gem trade, but his return to Thailand coincided with the 1997 Asian financial crisis, which left him with few alternative careers.

Combining his knowledge of gems and family connections with new technology, he began selling Chanthaburi gemstones on eBay. Today, he ships more than 200 stones a day to clients around the world.

At his home, Ponpoj upends a plastic bag and thousands of tiny sparkling red rubies tumble out. Worth 400,000 baht, they were recently bought on his behalf by his agent in Madagascar.

"I could sell these [uncut] stones at the market for one million baht," he says. "If I got them cut, I could make between two to three million baht, especially if there are some nice stones in there. But I only sell on eBay and 80 per cent of those are unheated, as my market wants unheated.

"Some people are very smart and they create new recipes for cooking stones all the time," he says, picking up individual stones with metal tweezers and giving them each a quick inspection. "Cooking is the same as when you cook in the kitchen. They have their stove at home and they cook. They have specific timings and specific temperatures, such as 10 minutes at 300 degrees Celsius then 15 minutes at 400 degrees Celsius over 20 hours. The colour can go up and down. If it's lighter, they can make it darker."

And it's this continuous experimentation that has led to advances in the treatment processes. For Lotus Gemology and similar establishments, this means having to increasingly give clients bad news about the quality of the gems they have bought.

Such laboratories didn't identify heat-treated gemstones quickly enough to stop the world market becoming flooded with them. But, in 2002, the labs discovered another Thai method, one that involved treating Madagascar rubies with beryllium, and issued a warning. In response, retailers such as Tiffany's threatened to boycott Thai stones until the industry was cleaned up.

"There is much more being done to stones than just heat treatment," says Wimon Manorotkul, a fellow of the Gemological Association of Great Britain and the owner of a gem laboratory. "Some are putting chemicals or oil on the stones, some put lead glass in. As long as they disclose this, everything has its own value."

And therein lies the problem. The initial dealer may disclose that a stone has been treated, but by the time it finds its way across the globe, that information has often been lost and the customer becomes the victim.

In May, US jewellery retailer Zales was exposed when an undercover investigation by American television news programme caught it selling rubies filled with lead glass to unknowing customers, who were told the stones were genuine.

It's a practice that can be traced back to those ground-breaking experiments in France.

"Basically, the French guy who developed the first commercial process [which involved heating gemstones to create beautiful coloured stones on a mass level] is the same guy who developed this," says Hughes, holding one of the first reconstructed rubies in the palm of his hand.

"[Verneuil] developed the process and then wrote it down and gave it to the French Academy of Sciences in a sealed note that was later opened. That was around 1894, but he didn't make the process public until 1902, so what he did for eight years, you can guess …"

We will never know exactly what Verneuil did with his synthesised rubies in that lost period, but what we do know is that his process, some 100 years later, would ultimately save a small Thai gemstone mining town from vanishing off the map, and help it become a major global player.