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Rare Earths and Rebels: The Myanmar Faultline in China’s Supply Chain

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Highlights

  • The Kachin Independence Army (KIA) captured critical rare earth mining territories in northern Myanmar, significantly impacting China’s mineral imports by an 89% reduction.
  • Rebel forces transformed mining regions into a strategic marketplace, implementing taxes and regulations on Chinese mining operations while controlling valuable heavy rare earth element supplies.
  • The mineral conflict exposes the environmental and geopolitical complexities behind the supply chains of green technology.
  • The situation reveals how insurgent groups can leverage geological resources for political power.

In the mountains of Kachin, a New World Order is being mined.

In the remote, battle-worn hills of northern Myanmar, a quiet but seismic shift has upended global supply chains. For years, China has relied on Myanmar’s Kachin State to meet its demand for heavy rare earth elements (HREEs)—materials essential to electric vehicles, wind turbines, precision weapons, and smartphones. These minerals, such as dysprosium and terbium, fuel both the green revolution and military dominance. But in late 2024, the tectonic plates of power shifted.

The Kachin Independence Army ( (opens in a new tab)KIA), an ethnic rebel militia long at odds with Myanmar’s central military junta, swept through the jade-colored highlands and seized the very mines that fed China’s tech boom. It wasn’t just a battlefield victory—it was a hostile takeover of a critical artery in the world’s rare earth supply.

A Coup of Clay and Chemicals

In a stunning offensive, the KIA captured Pangwa, Chipwe, and the border town of Kanpaiti, expelling the junta-aligned New Democratic Army–Kachin (NDA-K) (opens in a new tab) from the mining heartland. This region alone had supplied up to half of China’s heavy rare earth imports. By January 2025, Chinese shipments of rare earths from Myanmar had plummeted 89%. Terbium prices soared. At least a partial lifeblood of Chinese industry had been cut, and rebels were now holding the IV bag.

Yet the KIA didn’t rush to sell. They imposed silence—no exports, no deals. It was only in March 2025 that they agreed to release stockpiles already mined, slapping on a heavy $4,800-per-ton tax. The message was clear: if Beijing wanted its rare earths, it would have to pay—and perhaps, listen.

Deals with the Devil or Pragmatic Survival?

On paper, China is allied with the Myanmar junta. In practice, Beijing knows how to hedge its bets. It has long nurtured ties with rebel groups, including the KIA, to secure its border and protect its trade. Now, with the NDA-K vanquished, China’s rare earth dreams must flow through rebel hands.

Rather than dismantle the Chinese-run mines, the KIA began taxing and regulating them. Chinese miners—once protected by the junta—now worked under rebel oversight. It was a shift from state-backed exploitation to insurgent-led taxation. China gritted its teeth and complied.

So not a betrayal, but rather, transactional diplomacy. The KIA needs revenue to fund its war and rebuild Kachin. China needs rare earths. The battlefield became a marketplace for rare earth elements.

A Backup Plan, Hedging, and the Wa and the Wild East

Beijing, ever calculating, opened a second front. In Shan State, the United Wa State Army (opens in a new tab) (UWSA)—China’s long-favored proxy—moved to protect new rare earth deposits. Chinese-speaking crews, escorted by Wa militia, began hauling ore north across new smuggling routes. It was diversification by insurgency, by any means necessary for a state-backed profit for the Middle Kingdom.

These emerging mines, though smaller than Kachin’s, gave China breathing room. And a message to the KIA: You’re not our only option.

Pollution, Protest, and the Price of Minerals

Underneath this chessboard lies a poisoned landscape. Kachin’s rivers run red with acid runoff. Hillsides once covered in misty forest now lie scoured and bare, and in many places are not safe.  Local villagers, pushed aside by Chinese mining crews and militia guards, live in the wreckage—drinking tainted water, suffering skin diseases, watching their livestock die.

Even under the KIA’s watch, change has been slow. Though rebel leaders promise environmental safeguards and community benefits, villagers remain skeptical. In 2023, protests erupted when the KIA allowed Chinese miners into the Bamaw district. Only after local priests and youth marched did the KIA halt operations. Now, with far more territory under their control, the test is great, and so are the temptations.

Global Consequences, Corporate Complicity

This rebel-controlled rare earth drama doesn’t stay in the jungle. The minerals from Kachin and Shan wind their way through smelters in Yunnan, factories in Shenzhen, and supply chains in Detroit and Stuttgart. A 2022 investigation found that dysprosium and terbium from Myanmar ended up in components used by Apple, Tesla, Samsung, Siemens Gamesa, and other companies. Western companies—often unaware—are sourcing from conflict zones.

As public pressure mounts, NGOs and governments are demanding traceability. The green energy transition is now stained by a familiar irony: environmental salvation built on ecological destruction abroad.

China’s Tightrope, India’s Opportunity

China finds itself torn. It needs Kachin’s minerals, but it wants stability from the junta. It cannot openly back the rebels, but it must engage. So it whispers in backrooms, sends envoys to the KIO, and bankrolls whoever keeps the trucks moving.  After all, as Rare Earth Exchanges (REEx) has chronicled, this foundation supports their downstream monopolistic moves and the “Two Rare Earth Bases” Chinese imperative.

India, meanwhile, sees an opening. Reports indicate that Indian rare earth officials have quietly explored deals with the KIA. A long shot? Perhaps. However, in this new mineral cold war, everyone is seeking leverage.  REEx suggests intelligence agents from other places, even across the Pacific, descended on these lands.

The World Watches as Myanmar Digs

The rare earth struggle in Myanmar is not just about minerals. It’s about how modern empires sustain themselves. It’s about the moral cost of our phones, our turbines, our electric cars. It’s about how an ethnic insurgency turned geological fortune into geopolitical power.

In Kachin, a rebel army now dictates terms to a superpower. In Shan, another militia mines under Chinese protection. The junta is weakened. The ground is moving.

And as the rare earths are dug from the earth, the deeper questions remain: Will the KIA govern better than the warlords before them? Will China trade stability for minerals? Will the West care about the origin of its clean energy?

Or will the world continue to march toward a greener future, blind to the red-stained rivers that make it possible?

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Daniel

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One response to “Rare Earths and Rebels: The Myanmar Faultline in China’s Supply Chain”

  1. Rare Earths Investor Avatar
    Rare Earths Investor

    Yes, here’s the big question, will the US, etc., use Chinese involvement with the likes of Myanmar and the DRC, not to mention within Chinese borders worker issues to limit the Dragons’ future product access to the ROW value chain/consumer markets? Failure to comply with ESG requirements now being applied to ROW wannabees may be a stick for the West? We may see the arrival of tariffs, as well as bottom line and premium pricing being linked to ESG compliance for certain market entry; especially if we see RE market dumping as occurred in 2010-11. However, pragmatically, the West will also have had to be clearly dealing with the Chinese RE magnet issue. GLTA – REI

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