Yes David, that's correct.
They start as a crystal, and over time they become what I posted a pic of. Commercial mining for these gemstones can be carried out in a couple of ways, they can mine for what you posted a pic of, and often that will come as a lump of some sort of rock, with the gemstone crystal attached to it, or they can mine river gravel.
Sometimes the river gravels will be many meters below the surface of the ground, and they have to remove the over-burden before they actually get to the gem bearing deposit. Sometimes erosion over thousands of years will remove the over-burden, and you find the gemstones sitting on top of the earth, so its just a matter of the fossicker wandering around and picking up the rough. Sometimes you need to pan for them. I've seen some miners with big vacuum cleaner-like pumps, and they suck the gravel off the bottom of the river and run it down a sluice.
There's a lot of ways to mine or fossick for gemstones and for semi-precious stones, but currently here in Australia, I believe all the big operations are doing dry mining and removing over-burden to get at the gravels of long-gone rivers.
Semi-precious stones like agates and jasper you can often just pick up off the ground. I live on a lake and frequently go for a walk around the edge of the lake, occasionally I've picked up jasper and agate at the lakes edge. I even found a decent little agate in my backyard a couple of years ago.
But to get back to ruby. I've been out of gemstone dealing for more than 30 years now, but even 30 years ago, in fact even 50 years ago, it was very, very difficult to buy good ruby faceting material, my understanding is that these days it has gone from difficult to impossible. So what some dealers are doing is buying up old jewellery and remounting the stone. They particularly want bigger stones, because then they can make one big stone into two smaller ones, and it seems that this gives a higher profit.
This recut thing is not unknown in gemological circles. There was a diamond called the Tavernier Blue that first appeared in France in the 17th century. It came from India, and it was sold to the French ruler, after which it was known as the French Blue. In the 1790's it was stolen from the crown jewels and recut into the Hope diamond, so it would not be recognised, the smaller part of the Tavernier was recut and made into a ring for the wife of a Russian Emperor (Paul I?)
To get back to rubies. Yes, at the pasar level in Jawa all red stones that can easily be confused with rubies are called "mirah". In Javanese the word 'mirah' means both 'red' and 'ruby'. However, in Indonesian the correct name for ruby is 'mirah delima', or even 'batu delima'. Indonesian dealers in antiques and precious stones tend to take advantage of this potentially confusing situation. The good, reputable jewellers do not work the buyer like this and mostly they refer to ruby as 'ruby', so there is no confusion, but in the pasars anything that's red gets called 'mirah'.
I used to sell a lot of chrysoprase to wholesalers in Bali and Central Jawa. This stuff got cut into Chinese looking stones and mostly mounted in Chinese looking gold jewellery. When it hit the marketplace it was called "Hong Kong Jade". True jade it very hard, you will not mark it with a sharp knife. Chrysoprase is very soft and easily scratched, and of course only a fraction the value of jade.
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