China's Rare Earth Weak Spot: New Study Reveals 90% Myanmar Reliance for Heavy Rare Earth Supply

Highlights

• Chinese researchers analyze heavy rare earth elements (HREEs) metabolism, identifying supply risks and recycling opportunities.
• 90% of China's imported HREE compounds come from Myanmar, creating significant geopolitical vulnerability.
• Potential recycling of mine tailings and end-of-life magnets could provide substantial future supply of critical rare earth elements.

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A new study led by Chen Zhong and colleagues at Shanghai Jiao Tong University (opens in a new tab), as well as Xiamen University and  Beijing Institute of Technology, published in Environmental Impact Assessment Review (Vol. 116, 2026), offers one of the most detailed looks yet at how China manages its heavy rare earth elements (HREEs). These metals—dysprosium, terbium, yttrium, and others—are crucial for electric vehicles, wind turbines, fiber optics, and defense systems.

The Technology: Tracking Rare Earth “Metabolism”

The team applied a method called dynamic material flow analysis (dMFA). Think of it as tracking the “metabolism” of rare earths: from mining, processing, and use in products, to waste and potential recycling. By following nine HREEs over 2011–2020, the researchers sorted them into three categories:

• High risk (dysprosium, terbium): demand outstrips supply.
• Medium risk (yttrium, thulium, lutetium): stocks fluctuate.
• Low risk (gadolinium, erbium, ytterbium, holmium): supplies are accumulating.

The analysis also showed that 90% of China’s imported heavy rare earth compounds in 2020 came from Myanmar—a glaring geopolitical vulnerability.  Recently, Rare Earth Exchanges (REEx) interviewed a spokesperson for the Myanmar-based Kachin Independent Army (opens in a new tab), the group that is purportedly controlling many of the rare earth mines in Myanmar.  See the link.

Findings: Recycling Potential and Risks

The study highlights recycling as a partial solution:

• Tailings (mine waste) could provide up to 58% of dysprosium and 46% of terbium supply if recovered.
• End-of-life magnets could become a major source—but not until around 2037, when today’s EV and wind magnets are retired.

Despite being the global leader in HREE production, China is increasingly import-dependent and exposed to risks from conflict or trade disputes in Myanmar.

Implications for Investors and Policy

For global supply chains, the message is clear: China’s dominance does not equal security. Even Beijing faces shortages in its most critical HREEs. This raises important questions:

• How fast can recycling move from lab scale to commercial scale?
• Will China diversify imports, or double down on Myanmar despite instability?
• For investors, which non-China projects might step up to fill gaps in dysprosium and terbium?

Limitations

The authors caution that some assumptions—such as steady product lifespans and incomplete trade data—could underestimate or overlook certain flows. And the analysis covers only China, not global HREE dynamics.

Conclusion

This research underscores that even the rare earth superpower is walking a tightrope. For markets and policymakers, the study is both a warning and a roadmap: invest in recycling, diversify supply, and prepare for long-term demand surges in magnets, lasers, and fiber optics.

Source: Chen Zhong et al., Environmental Impact Assessment Review (Vol. 116, January 2026), “Advancing sustainable management of heavy rare earth elements in China through group metabolism analysis.” https://doi.org/10.1016/j.eiar.2025.108125 (opens in a new tab)

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