Summers are so savage that the locals live underground, in subterranean ‘‘dug-outs’’. But the potential rewards are immense, with the dusty settlement surrounded by the richest opal fields on the planet. A savvy prospector could become a millionaire overnight.

Nearly everyone in Coober Pedy, a rugged frontier town with more than a hint of the Wild West, is involved with opals. However, lately the place has acquired a forlorn air. While Australia’s national gemstone is prized all over the world, the industry is struggling, thanks to the global recession and a flood of synthetic stones on to the market.

Demand has plunged so low that a course in opal cutting and polishing, offered at the town’s college, has been scrapped. Stuart Jackson, who ran the tertiary-level course, the only one of its kind in the world, says: “Opal is a luxury item and times are tough. You can’t eat it, you don’t need it, so people aren’t buying it.”

The fake synthetic rival product, made from plastic and silica, is imported into Australia, mainly from China and Japan. It is perfectly legal to sell it provided it is labelled correctly. But there lies the problem, according to Boro Rapaic of the Opal Industry Alliance, which represents miners and traders in South Australia.

“Most of the time it’s sold as genuine stuff, and the vast majority of people can’t tell the difference,” says Rapaic. “They go into a shop to buy the real thing and end up with a piece of junk that’s almost worthless. Unless you’re an expert, you can’t be sure. They make it so good now, the colours are even better than genuine opal. Even some miners are fooled.”

In scorching Coober Pedy – where

not only homes but also shops, churches, hotels and restaurants are built underground – styles itself the ‘‘opal capital of the world’’. Even there, though, fake gems can be found on display. The same is true of some of the large showrooms in Sydney, which market their ‘‘genuine Australian opal’’ to tourists in quest of a shimmering memento.

With its brilliant plays of light and colour, opal has always dazzled the human imagination. Around 97% of the world’s opals come from the Australian Outback, which attracts a steady stream of mining optimists hoping to strike it rich. Miners require only a permit, a good instinct and basic equipment. “Everyone here is living on a dream,” says Peter Rowe, a former miner.

However, dealers say the man-made stones are eating into their market share and driving down the price of precious gems. Like other luxury products, opals are also suffering from consumers tightening their belts. Genuine opal costs up to £27,200 a kilo. A kilo of the plastic stuff can be had for just over £800.

Rapaic says: “Every synthetic stone that is sold is one less of our genuine opals sold. That’s what’s killing the market slowly. We know it’s a problem, but there’s not much we can do. The government needs to police it, to make sure everything is properly labelled.”

Despite the industry’s downturn, Coober Pedy continues to lure outsiders, and it retains its hard-bitten reputation. Trucks displaying ‘‘explosives’’ signs clatter around the streets, and a notice outside the drive-in cinema politely requests that patrons refrain from bringing in dynamite. Poker games turn into three-day gambling sprees, and mining disputes are settled with fisticuffs in the pubs.

Over the past 20 years, Jackson has taught hundreds of people the rarefied arts of gem cutting and polishing. Recently student numbers have dwindled, though. Many came from other Australian states or abroad, and the year-long course, combined with travel and accommodation costs, had become too expensive. The college has now closed it down.

According to Jackson, the cost of mining has gone up dramatically. “Fuel has gone up, explosives have gone up, licences have gone up,” he says. “So there are fewer people mining and there’s less opal coming out of the ground.

“It’s very hard to attract young males into the industry now, because it’s hard work and it costs a lot of money. There are very few boys going up there with a sense of adventure. It’s only the sons of miners that are sticking it out and working up there.”

His students learnt how to transform a rough stone into a carved, polished gem. They were also taught geology, gemology, history and jewellery-making. Nearly three-quarters were women, often miners’ wives who would prise a few stones out of a chunk of

opal-encrusted rock before their husbands sold it.

“It’s a lovely medium to work with,” says Jackson. “It’s quite a soft stone, so you can work with it easily and it takes a very high shine very quickly.” Cut and polished, opal is worth three to four times more than in its rough state.

According to John Dustan, a Coober Pedy miner who runs a shop in the town, opal prices have been stagnant for years. “A lot of factories overseas that used to buy our opal for inlay work have switched to synthetic opal,” he says.

“Twenty years ago in Coober Pedy there would always be at least 20 to 30 buyers ready to buy opal on the fields. Now you’re lucky to find three or four.”