Highlights
- The Kachin Independence Army (KIA) captured the strategic border town of Kanpaiti.
- This significantly impacts Myanmar’s rare earth mineral exports to China.
- KIA disrupted rare earth mining operations.
- A 35,000 yuan tax per ton was imposed on mineral exports.
- The actions caused global price fluctuations.
- These actions represent a major setback for Myanmar’s military regime.
- The KIA’s actions challenge the regime’s control and economic interests in the region.
According to the Associated Press (opens in a new tab) (AP), in November 2024, the Kachin Independence Army (KIA), a powerful rebel group in Myanmar, seized the key border town of Kanpaiti, a critical hub for rare earth mining. This loss was a major setback for the military regime, which had been facing an intensifying insurgency from ethnic armed groups. The capture of Kanpaiti left the military in control of only one town with a border crossing, Muse, and deprived it of potential profits from the lucrative rare earth mining industry that supplied China with critical minerals for high-tech industries.
The fall of Kanpaiti followed a broader offensive launched by three major militias against the ruling junta in late October 2023. Since then, additional ethnic militias, including the KIA, had joined the fight, further weakening the regime’s hold on the country. The KIA had been increasing pressure on a rival militia, the New Democratic Army-Kachin(NDA-K), which had been allied with the military and controlled unlicensed rare earth mines in the region. These mines, numbering over 300, had generated approximately $1.4 billion in revenue from rare earth exports to China last year. The environmental and social toll of these mining operations had been severe, according to a report from Global Witness.
Despite this major setback, analysts cautioned that the loss of Kanpaiti might not significantly alter the military’s ability to continue its campaign. China, which had strategic interests in Myanmar, had attempted to broker peace between the military and ethnic militias but had limited success. Myanmar’s military, known as the Tatmadaw, had suffered a series of unprecedented defeats, particularly in the east and in Rakhine State. However, experts believed the junta still had alternative revenue streams to fund its war efforts.
According to (opens in a new tab) Reuters, from March 27, 2025, the KIA has now allowed the export of stockpiled rare earth minerals to China after a prolonged period of halted shipments. Since taking control of Panwa and Chipwe—two towns at the heart of Myanmar’s rare earth mining industry—last October, the KIA’s rule has caused China’s rare earth imports to decline significantly, leading to a rise in global prices. However, in a recent move, the KIA announced that shipments of these minerals would resume, subject to a hefty tax of 35,000 yuan ($4,800) per ton. The statement, reviewed by Reuters, was reportedly sent to miners in the region on Wednesday.
China, as the world’s leading consumer and importer of rare earth elements, heavily relied on Myanmar for its supply of these crucial minerals, which were used in manufacturing advanced electronics, electric motors, and wind turbines. The halt in Myanmar’s exports had pushed up the price of terbium oxide, a key rare earth material, by nearly 22% over six months. However, with the resumption of exports, prices had slightly declined in anticipation of increased supply.
The Kachin Independence Army, as described (opens in a new tab) by Wikipedia, was the military wing of the Kachin IndependenceOrganization (KIO), representing the Kachin ethnic group, which consisted of six tribes residing in Northern Myanmar, Yunnan (China), and Northeast India. The KIA funded its operations through regional taxation and the trade of jade, timber, and gold. It was armed with a mix of AK-47s, locally manufactured weapons, and some artillery. The group’s headquarters were located in Laiza, a town near the Chinese border in southern Kachin State.
The KIA’s success in capturing Kanpaiti and controlling rare earth mining territories had further strengthened its position in the ongoing conflict against Myanmar’s military regime. However, as China continued to push for stability in the region due to its economic interests, the long-term outcome of this struggle remained uncertain.
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