HONG KONG (Reuters) - Standing alongside glass cases filled with diamonds, rubies, sapphires and other stones on display at an international jewellery fair in Hong Kong, gem buyers discuss what they prize most in precious stones.

"Quality," most reply without a second thought.

They stare blankly when asked if they have ever heard of silicosis and whether they have a policy of refusing to buy stones from factories that don't protect workers from the disease.

"I am sorry, I know nothing about it," said one gemmologist at the fair, which drew 30,000 buyers in early March.

Over the border in China's southern Guangdong province, thousands of stonecutters are dying from silicosis, an incurable lung disease caused by inhaling silica dust while drilling, cutting, crushing, grinding or blasting slabs of gemstones.

"Most die in their mid-40s. Some die even younger, just a few years after diagnosis. They also die of TB (tuberculosis) and heart attack," said Shek Pingkwan of Labour Action Asia.

The World Health Organisation (WHO) estimates that more than 24,000 people die in China each year from the disease which scars the lungs and leads to severe respiratory problems and death.

The number of silicosis cases in southern China grew so high about eight years ago that health experts warned the illness was reaching epidemic proportions.

The Chinese government swiftly demanded that large gemstone companies compensate dying workers. But rights groups say the situation has not improved much as gem cutting work has been outsourced to unlicenced contractors to avoid law suits.

Deng Winghong, 37, worked as a stonecutter for 10 years before he was diagnosed with silicosis.

"The environment was very bad where I worked. The managers didn't tell us about the harms and we were given two masks a month, the thin sort," Deng said in Huizhou city in Guangdong.

"There were many people in the room and it was very dusty. There was one ventilator but it didn't have much effect. They shut the windows because our factory was by the road. The owner didn't want the dust to get out into the street and pollute the air outside in case it drew attention from the authorities."

Silica is a very common compound found in sand and many types of rocks. When rocks are drilled or cut up, it produces small silica dust particles and these lodge in air sacs in the lungs where they cannot be cleared out by coughing.

The lungs get inflamed and harden. Symptoms include a dry cough, fatigue, loss of appetite, laboured breathing and chest pain.

"I have seen two friends die. Before they died, their bodies swelled and suddenly dried up. They had to have oxygen tanks and couldn't even walk on their own," said Deng, who suffers from shortness of breath, fatigue and chest pain.

"I know of over a dozen colleagues who have already died. Some died when they were only in their 20s."

Silicosis is more prevalent in developing countries such as China, India, Vietnam and Brazil where labour is cheap, people are desperate for work and safety regulations are lax.

"There is widespread lack of awareness of the problem and its magnitude as well as lack of knowledge of available solutions," the WHO said on its website.

Chinese workers are still cutting gems without masks despite increased awareness of silicosis by the authorities and industry groups such as the World Jewellery Confederation which calls for better safety standards for gem workers.

Since the government began demanding compensation for dying workers, distributors often outsource stone cutting to fly-by-night factories, workers in China say.

"These companies are evil. They have subcontracted the most harmful jobs to small factories so they won't have to worry about compensation," said Su Mingguo, a worker dying from silicosis.

"Many small factories are unlicenced. Workers are not protected by insurance ... When they get sick and go back to the factories, the bosses pack up and open up elsewhere."

"There was a case where a boss ran away and workers were just left with the rocks and some broken machines and they shared the money between them and ended up with a few hundred yuan each."

Some villages in Huizhou are entirely devoted to processing gemstones. In a home in one village, a migrant worker from Sichuan and his wife work on crude machines fitted with blades that cut strips of stone into tiny cubes.

Although there is a ventilator in the hut, the air is thick with dust as their young daughter runs about.

"Worried about the disease? Not at all. The question is whether we have food to eat. No one thinks about getting the disease," said Lu Jun, a neighbour and gem cutter.

Lu's younger brother died of silicosis, but he is more worried about China's hordes of gemstone workers who have lost their jobs because of the global financial crisis.

For workers who eke out a living cutting gemstones, earning money for food and other basic needs is more important than long-term health risks.

Yet rights groups say that if the people that buy gems ask tough questions about the workers that cut the stones then this could be enough to pressure gem distributors in China to educate workers and provide masks and properly ventilated rooms.

"What we need really is more health education and legislation. There is now good protective equipment and workers must simply use them," said pathologist Allen Chan at the Chinese University in Hong Kong.