Highlights

• The Kachin Independence Army has seized control of critical rare earth mineral zones near the Chinese border.
• KIA has become a key player in global heavy rare earth supply.
• Myanmar's rare earth exports to China have surged to 290,000 tons.
• 85% of these exports occurred after the 2021 military coup and the expansion of over 370 active mining sites.
• China is dependent on Myanmar for over 60% of its heavy rare earth imports.
• This dependency has led to strategic acceptance of KIA's new trade terms and control over mineral extraction.

Myanmar’s northern Kachin State has become a strategic chokepoint in the global heavy rare earth (HREE) supply chain, following a dramatic shift in control of critical mineral zones. Since Myanmar’s 2021 military coup, the Kachin Independence Army (KIA) has steadily taken control of key extraction areas near the Chinese border, including Chipwi and Pangwa—home to some of the richest deposits of dysprosium and terbium in Southeast Asia. These materials are essential for electric vehicles, wind turbines, and advanced military systems.  Myanmar’s rebels now just happened to be at the top of the Rare Earth Exchanges Heavy Rare Earth (HREE) Project/Deposit ranking worldwide.  Rare Earth Exchanges (REEx) can attest this ranking has been controversial, attracting a lot of attention.

In late 2024, China temporarily shut its border crossings following the KIA’s seizure of rare earth-rich regions. But trade resumed soon after, under new terms dictated by the KIA: a fixed price of ¥35,000 per metric ton and a 20% export tax on rare earth concentrates. This arrangement effectively formalized the KIA’s role in cross-border trade, granting the group de facto control over a vital supply corridor. The situation mirrors China's tacit acceptance of similar governance structures in the United Wa State Army’s (UWSA) control over tin exports.

Data from ISP-Myanmar and Global Witness highlight the scale of this transformation. Between 2017 and 2024, Myanmar exported over 290,000 tons of rare earth material to China—85% of that after the coup, reflecting the KIA’s growing control and the surge in demand. The number of active mining sites has ballooned to over 370, with more than 2,500 acid leaching pits now active in Kachin. While economically significant, this rapid expansion has brought severe environmental degradation, including toxic runoff, deforestation, and groundwater pollution extending beyond Myanmar’s borders into northern Thailand.

The KIA’s rise as both a tax authority and logistics manager in Myanmar’s rare earth sector marks a turning point in how natural resources shape governance. With China dependent on Myanmar for over 60% of its heavy rare earth imports, Beijing appears to have prioritized stable access over political alignment. The implications are far-reaching: Kachin has become not just a mining zone, but a geopolitical lever with consequences for China’s industrial policy, Myanmar’s internal power balance, and the ethical complexity of global supply chains.

There are issues for certain: pollution with ecological damage, conflict with potential for violence, and some rogue groups and traders, but given the rankings and influence on the HREE supply chain, even the Trump administration purportedly heard some proposals recently tied to Myanmar.