Highlights
- China continues to dominate rare earth supply chains by leveraging unregulated mines in Myanmar's Kachin state.
- Approximately 170,000 tons of rare earth feedstock are imported by China.
- The extraction involves complex political dynamics, including ethnic minority groups fighting against military control and environmental devastation.
- The rare earth supply chain's fragility is exposed through Myanmar's unstable borderlands.
- This situation highlights potential disruptions for global rare earth investments.
The Economic Times reports (opens in a new tab) that China continues to dominate rare earth supply chains by tapping into Myanmar’s unregulated mines. This is well-documented: Global Witness (2022, 2024) and independent think tanks confirm that rare earth extraction in Kachin state surged after Myanmar’s 2021 coup, with over 240 sites operating. China did indeed import around 170,000 tons of rare earth feedstock from Myanmar in recent years—factual figures that align with Chinese customs data and NGO reporting. The environmental and social devastation caused by these operations is not disputed.
Rare Earth Exchanges (REEx) has chronicled the battle over Myanmar's rare earth elements, the socio and environmental costs, and of course the dangers of civil war. The Myanmar Rebels and their heavy rare earth element mines are at the top of the REEx Heavy Rare Earth Project/Deposit Database. Also, REEx has engaged with spokespersons involved with the Kachin State. See “’We Never Got What Was Promised’: A Rare Earth Frontline Report From Kachin State.” The ethnic groups fighting for their rights and liberties are predominantly Christian, converted when the British colonized the land. They are under attack by the state—a military coup known as “the Junta”, the latter supported by both China and, allegedly, Russia.
Where Facts Fade Into Fog
The Indian article suggests “secret deals” between Chinese firms and insurgent groups like the Kachin Independence Organization (KIO). While payments and levies have been reported by outlets such as Reuters, and REEx has been informed of all sorts of Chinese presence in the region, the evidence remains inconsistent—KIO spokespeople themselves have denied confirming such arrangements. The claim that India and the U.S. could feasibly tap these same borderland deposits reads more like geopolitical speculation than near-term reality; logistical barriers and Chinese control of transit routes make such scenarios improbable.
Plus, the framing—“Beijing’s secret deals with militants”—leans heavily toward dramatization. While evocative, the phrasing risks obscuring structural truths: China’s strategy is not a one-off backroom bargain but a systemic outsourcing of environmental risk to its weaker neighbor. The narrative centers on shadowy intrigue, but readers should note that the real story is about supply chain pragmatism, state tolerance, and the externalization of costs onto marginalized borderland communities.
Why It Matters for Rare Earth Investors
Here’s the takeaway: China’s rare earth magnet dominance isn’t built only on Baotou or Sichuan. It’s propped up by volatile frontiers like Kachin, where supply can be disrupted by militancy, cross-border politics, or environmental backlash. For investors and policymakers, this highlights the fragility of the supply chain. Western rhetoric about “friend-shoring” rings hollow until alternative sources—be they in Africa, Australia, or recycling—are scaled. Myanmar’s instability makes it a critical pressure point: a weak link in China’s armor and a potential flashpoint in future trade disputes.
Citation: Shantanu Nandan Sharma, Economic Times, September 14, 2025.
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The information I get from Myanmar is that most of the physical mining is being done directly by Chinese, protected by soldiers from the PLA. While the Wa and Kachin are holding off the Junta they have to kowtow to the Chinese or fight on two fronts.