Highlights

• Reuters reports U.S. officials are exploring strategies to divert Myanmar's heavy rare earths away from China, considering direct negotiations with the junta or engagement with ethnic rebel groups like the Kachin Independence Army (KIA).
• The KIA controls significant rare earth territories in Kachin State, representing a potential geopolitical leverage point in Myanmar's ongoing civil conflict and global rare earth supply chains.
• Multiple proposal pitches to the Trump administration suggest potential policy shifts, including lifting sanctions, collaborating with India, and brokering governance deals to secure access to strategic rare earth resources.

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In a revealing but murky report by Reuters (opens in a new tab), U.S. officials in the Trump 2.0 administration are reportedly entertaining proposals to divert Myanmar’s heavy rare earths (HREE) away from China. The article claims multiple camps are lobbying Washington: some push direct talks with Myanmar’s junta, while others want to sidestep the regime and work with ethnic rebel groups, particularly the Kachin Independence Army (opens in a new tab) (KIA), which controls much of the HREE-rich territory. So far, no decisions have been made. But as always at Rare Earth Exchanges, we ask: What’s real? What’s spin?

We can confirm that Reuters was in touch with Rare Earth Exchanges (REEx) to probe for information. Obviously, our proprietary index lists the Myanmar Rebels holdings as the top heavy rare earth element mines worldwide.   And we were certainly disappointed that Reuters chose not to include the dynamic list ranking the KIA number one heavy rare earth location.

Myanmar(Kachine State in Red)

Analysts Validate

According to an entry via the Center for Strategic and International Studies (opens in a new tab) (CSIS), the Kachin State is now a geopolitical fulcrum in Myanmar’s civil war—and in the global rare earth struggle. The KIA, once ambivalent to the 2021 coup, has since seized control of nearly all China-facing border crossings and most of Myanmar’s rare earth mines. Its offensive in Bhamo threatens to tip eastern Kachin fully out of junta hands—prompting a surge in Chinese military aid to Myanmar’s military.

According to the piece authored by Michael Martin as well as ongoing REEx reports,  the KIA, allied with other ethnic armed organizations, has captured hundreds of military posts and over a dozen towns, while forming loose consensus around eventual autonomy for an ethnically defined Kachin homeland. Their strategy: secure territory first, then talk federation.

But Beijing is pressuring rebel groups while hedging its bets on both sides of the war to safeguard resource access as we discuss at the end of this piece. And this fact should not be underestimated.

The implications are stark: KIA control over rare earths has national and international stakes—not just for Myanmar’s fractured future, but for China’s supply chains and U.S. strategic policy. And CSIS’ Martin is absolutely correct.  Until the fighting ends and governance stabilizes, there will be no clear path to legitimate trade in rare earths—and no easy decisions for Washington.

The Heavy REE Reality

Grounded in reality is the fact that China has a firm, but volatile grip on Myanmar’s HREEs. Myanmar supplies around 50% of China’s heavy rare earth feedstock, particularly dysprosium and terbium ,from ionic clay mines in Kachin and Shan states. This has been confirmed by Chinese customs data, USGS reporting, and independent field research.

Plus, the KIA has control over most of Myanmar’s rare earth territory. Also true. Since at least 2013, the KIA has held de facto authority over northern Kachin, including key mining zones. Any serious attempt to access Myanmar’s HREEs without China would have to navigate these dynamics.

Reuters Reaches Out to REEx

And as we confirmed with Reuters, Poppy McPherson, there is American interest in the Myanmar mines. That’s because there is a growing interest in derisking Chinese REE supply chains. The Trump administration has already inked a floor price deal with MP Materials and is backing domestic and allied supply chains across Africa, Australia, and Latin America.  And we know from multiple credible sources that the Trump administration, via the Department of Defense, is on the hunt for heavy rare earth element sources.

The Pitch House

According to the piece, a behind-the-scenes pitch to the Trump administration included a range of proposals to shift U.S. policy toward Myanmar in exchange for access to its heavy rare earths. These included lifting sanctions on the junta and its allies, easing President Trump’s proposed 40% tariffs, collaborating with India for REE processing, and appointing a U.S. special envoy to coordinate the effort.

A July 17 meeting in Vice President JD Vance’s office—attended by his Asia and trade advisers—featured Adam Castillo (opens in a new tab), former head of the American Chamber of Commerce in Myanmar, who now runs a security firm there. Castillo reportedly urged the U.S. to broker a self-governance deal between the Myanmar military and the rebel KIA, emulating China’s approach. While Vance himself did not attend, sources say the Trump team has been reassessing Myanmar policy since January. Both the White House and Vance’s office declined to comment.

A Dynamic, Volatile Situation

The Reuters article tackles what is, by nature, an evolving and opaque situation. Based on reporting by Poppy McPherson and colleagues, and citing unnamed sources and intermediaries, discussions around Myanmar’s rare earths may be underway—though no formal negotiations have been confirmed. Any direct U.S. engagement with Myanmar’s military government would represent a significant policy shift, given existing post-coup sanctions.

In a Signal discussion with REEx co-founder and CEO Daniel O’Connor, McPherson indicated that she had heard various proposals are circulating---likely from business lobbyists and, as we interpreted, former advisors to Aung San Suu Kyi. While such outreach is entirely plausible, it remains unverified through official channels.  We have heard rumblings as well, but could not share the details based on confidentiality considerations.

Lobbying efforts targeting the Trump administration on rare earth access are not new. Still, Reuters suggests that, in this case, some pitches may be reaching policymakers through informal or unvetted intermediaries. Given the strategic urgency around rare earth supply chains, a wide range of actors are reportedly seeking to influence U.S. policy in this space.

Sino Sphere: Risk Abounds

Absolutely, there are red flags—and real risks. Myanmar’s security environment is undeniably volatile, with KIA-controlled regions still active conflict zones. Any Western investment, let alone rare earth extraction, is premature without high-level diplomacy and ironclad security guarantees. But just as crucially, Chinese interests are working every angle inside Myanmar. From financing to shadow trade routes, Beijing’s influence is not only entrenched—it’s ubiquitous. Industry insiders confirm that Chinese-backed buyers, brokers, and intermediaries maintain deep relationships with both the junta and rebel actors. Any attempt by the West to intervene in Myanmar’s rare earth sector will face not just logistical obstacles—but a well-entrenched, state-aligned Chinese presence already shaping the terrain. 

At the same time, the REEx ranking has led to some members of KIA to join the REEx Forum (opens in a new tab).  REEx reached out to the group and is working on trying to secure an interview.

It is true that bypassing the junta to strike deals with rebels would breach international norms—possibly dragging  U.S. firms into a series of high-risk situations.  On the other hand, as we have reported, this is seriously contested terrain; such resources are needed for U.S national security interests. But they also happen to be needed for Chinese nationals' security.

So what’s the verdict on the Reuters piece? This is real policy smoke, but no fire yet. The Reuters story is responsibly cautious—no wild claims, no misinformation. But investors beware: geopolitical theater doesn’t equal shovel-ready opportunity.

Strategic interest in Myanmar’s HREEs is real, but the jungle isn’t Wall Street—although the latter can feel that way. Until Washington speaks officially—and bullets stop flying—this story remains speculative.

Check out Rare Earth Exchanges Project/Deposit Rankings, the Forum (opens in a new tab), and the growing library of interviews via the Podcast on YouTube (opens in a new tab).