Highlights
- Myanmar emerges as the world’s leading exporter of heavy rare earth oxides (REOs), supplying 50% of global heavy rare earths supply.
- An ongoing civil war, including the Three Brotherhood Alliance’s Operation 1027, has disrupted the nation’s rare earth mining operations.
- The incoming Trump administration is urged to support Myanmar’s resistance movements as a strategic counter to China’s global influence.
A Los Angeles engineering consultant who also happens to have been born in Myanmar recommends the incoming Trump administration pay attention to his country of birth. James Shwe, a Burmese born in Yangon reports in EurasiaReview (opens in a new tab) that an unfolding complex geopolitical game in Myanmar centers at the “intersection of rare earth minerals, a protracted civil war and shifting global alliances.” A “perfect storm” Trump and his administration must understand and move swiftly in the new year, both to mitigate the potential dangers and capitalize on opportunity and Fortune.
Rare Earth Exchanges was founded in October 2024 to provide more transparency and accessibility to the topic of rare earth elements, especially given the funding crisis associated with China’s complete dominance over the rare earth supply chain.
With a “dramatically altered landscape of Myanmar’s rare earth industry (opens in a new tab) and its global impact” this Asian nation becomes the biggest supplier of heavy rare earth elements (HREEs), beating China as well in exports.
A well written, concise and impactful piece, albeit to some extent hawkish, Rare Earth Exchanges provides a link (opens in a new tab) and a breakdown.
Why is Myanmar so important in the rare earth oxides (REO) business?
The nation has emerged as the leading global exporter of heavy REOs, with its exports representing as much as 50% of the global heavy rare earths supply.
How many tons of rare earth oxides (REOs) did Myanmar export in 2023?
50,000 metric tons of REOs, separated from ion-adsorption clays to China. This far exceeds China’s own do
Last year, Myanmar exported approximately 50,000 metric tons of rare earth oxides (REOs) from ion-adsorption clays to China, far exceeding China’s domestic mining quota of 19,000 tons according to Mr. Shwe.
What’s the crisis—creating both risk and opportunity for the United States?
As Rare Earth Exchanges has reported an ongoing civil war. The rebels, an opposition force according to the Burmese consultant in Los Angeles, continue to make gains especially in the regions of the nation controlled by ethnic-armed groups.
What was a pivotal event in this ongoing civil war?
By October 2023, the Three Brotherhood Alliance launched Operation 1027, a coordinated offensive where rebels captured over 500 military outposts and several key towns. This was a disaster for the military junta’s control and morale.
What specifically occurred that impacted the country’s rare earth mining operations?
The Kachin Independence Army (KIA) seized control of Myanmar’s rare earth mining region in mid-October 2024. And since then, the KIA commandeered the leading mining center. One that includes production sites in Pang War, Chipwi, Phimaw, and Hsawlaw.
The EurasiaReview piece portrays conflict and mounting challenges facing the rebels, despite unprecedented successes as well to date. For example, the junta faces declining morale, defections, a failure to recruit enough people to keep the army’s size stable, and worsening conditions for soldiers. All these unfolding activities have disrupted the entire global supply chain of rare earth metals, making American and other nations of the West more vulnerable given changing markets.
What has China done in response?
China has imposed a trade embargo on Myanmar.
What’s the Chinese role in this conflict?
According to Mr. Shwe “China’s role in this conflict is crucial and complex.”
The world’s second biggest economy heavily depends on Myanmar now. That’s because the nation has outsourced much of its rare earth extraction to Myanmar. According to the Burmese Angeleno:
“Beijing has consistently promoted sham elections and forced ceasefires that ultimately benefit the military junta. However, China’s approach is primarily driven by its strategic interests, including access to Myanmar’s natural resources and its crucial geographic position for China’s Belt and Road Initiative with ocean access from landlocked western China.”
What should the United States do?’
The incoming Trump administration, according to the Burmese engineering consultant, should “seize the moment” boosting support to the resistance movements of Myanmar as opposed to the haphazard, unsustainable approach China is taking.
Full throttle American support makes complete and total sense according to the author, especially given the converging mission of the advancing of democracy, securing strategic geopolitical gains while backing humanitarian imperatives.
Thus far the author interprets Trump’s cabinet nominations as signaling “a hardening stance on China and a renewed focus on securing America’s supply chains.”
For example, Florida Senator Marco Rubio (opens in a new tab) has been nominated as Secretary of State and has been a “ long been a vocal critic of China’s dominance in the rare earth market. He was also a staunch advocate for democracy in Burma.”
Not only has Rubio expressed concerns about China’s control of the world’s rare earth supply, but he has also authored several articles, plus introduced legislations about rare earths and China. While Florida Congressman Mike Waltz has been nominated as National Security Advisor. With a military background, the Green Beret veteran according to the author is a “hawk” when it comes to China. Trump appears to be ramping up a significant effort to counter China’s growing world dominance, especially in areas where the Asian nation has supreme advantage, such as i the rare earth elements sector.
Representative Michael Waltz (opens in a new tab), set to become National Security Adviser, brings his military background as a Green Beret veteran and hawkish views on China to the table. Waltz’s appointment suggests a continued focus on countering Chinese influence.
There are others the author calls out such as Congresswoman Elise Stefanik (opens in a new tab), who has been nominated as UN Ambassador, a staunch Trump backer and member of the Congressional Chinese Task Force, the armed forces committee and the intelligence committee.
For Congressional actions that impact U.S. position in Myanmar and against China, who is key according to the author?
Senator John Thune (opens in a new tab) from South Dakota elected as the new Senate Republican leader, Succeeding Mitch McConnell, Thune now becomes the nexus interfacing with the incoming Trump administration on legislative matters, and this will include foreign policy initiatives, such as Myanmar.
Thune is no stranger to conflict with China. For example, James Shwe “introduced a bipartisan resolution with Senator Angus King to challenge China’s self-designation as a developing country at the World Trade Organization (WTO).”
Thune is known for advocating for bolstering U.S. national security and economic competitiveness to counter China’s influence.
So, is the author of this piece calling for more direct U.S. support of Myanmar rebels?
Yes. The author urges the incoming Trump administration, with its overtly hawkish elements, particularly against China, to act and change the course of history namely by supporting the Myanmar Spring Revolution.
Embracing what Rubio calls “an era of pragmatic foreign policy,” the incoming Trump government should take on the topic of Myanmar, “balancing strategic interests with ethical considerations and long-term regional stability.” America must not follow China’s approach, and rather make bold, impactful backing of the resistance in Myanmar.
What’s the downside to the proposed approach?
Rare Earth Exchanges suggests the backing of resistance forces in Myanmar, such as the opposition to the military junta, involves significant risks for the United States. The author of the EurasiaReview fails to contemplate what could go wrong. Such risks include geopolitical tensions, potential escalation, and broader regional consequences. Rare Earth Exchanges offers a breakdown of these risks and the possibility of conflict with China.
First, we start with key risks. Geopolitical tensions with China could explode. As discussed in this and other Rare Earth Exchanges articles, Myanmar is strategically important to China, serving as a vital link in Beijing's Belt and Road Initiative and providing access to the Indian Ocean. China depends heavily on Myanmar for REE extraction.
U.S. support for opposition forces could be perceived as an attempt to counter Chinese influence in the region, worsening U.S.-China relations. China has historically backed the Myanmar junta and might view U.S. involvement as a direct threat to its sphere of influence.
Enter the risk of proxy conflicts, an imminent, marked surge in assertive backing could spark dangerous conflicts. If the U.S. goes full throttle to support the resistance.
It’s a real possibility that Myanmar becomes a proxy battleground between the U.S. and China, heightening regional instability. Plus, a proxy war could draw in neighboring countries and lead to broader regional conflict. And what if the violence were to escalate?
External support for resistance forces could prolong the conflict, increase casualties, and destabilize Myanmar further. This could worsen the humanitarian crisis, driving more refugees into neighboring countries like India, Thailand, and Bangladesh. Also U.S. direct involvement could be criticized as interference in Myanmar's internal affairs, potentially eroding its diplomatic credibility in the region. This could alienate ASEAN nations that prefer non-interventionist approaches to regional conflicts.
Then comes the impact of such proposed moves on American and Chinese bilateral relations. Any U.S. move in Myanmar would likely complicate already strained U.S.-China relations, impacting trade, technology, and global diplomacy.
Could This Lead to War with China?
While direct war between the U.S. and China over Myanmar remains, we think highly unlikely, the situation could heighten tensions and lead to indirect confrontations. The risks depend on a confluence of factors and forces. If Beijing perceives U.S. actions as a direct challenge, it might increase military support for the junta or engage in aggressive posturing, such as military drills near the region.
Miscommunication or miscalculation during such a tense period could spiral into broader conflict. Plus, Myanmar's crisis might intersect with other flashpoints, such as Taiwan or the South China Sea, amplifying risks of confrontation.
What could be a rational approach?
As with everything China (either directly or indirectly) we suggest diplomatic initiative is nearly always the best way forward. Of course, when no real choice American power can be mobilized, but the incoming administration’s pledge was to end wars.
Working through ASEAN and the UN to foster dialogue and limit direct intervention.
Focus on humanitarian aid and economic sanctions targeted at the junta, avoiding direct military support to resistance groups. Engage China diplomatically to ensure mutual understanding and prevent escalation over Myanmar. From this point of view American will incrementally, over time, lessen dependencies on Chinese rare earth processing control.
The situation is delicate, and balancing support for democracy with the risks of geopolitical conflict is crucial, all in the context of taking on Chinese control of the rare earth supply chain.
Daniel
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