Myanmar has rapidly emerged as a pivotal, albeit often overlooked, player. The nation has risen to become one of the world's largest suppliers of heavy rare earth elements (HREEs), with virtually all its production destined for China. While small-scale rare earth mining in Myanmar dates back to the late 1990s, the industry's scale significantly increased in the late 2000s, experiencing a rapid expansion after 2015. This growth is visibly corroborated by time-series satellite imagery, which documented over 300 rare earth mining sites across 700-800 square kilometers in the Chipwe/Pangwa region alone by 2022. Myanmar now contributes nearly half of the global production of HREEs. This rapid expansion, particularly noticeable since the 2021 coup, has seen the number of mining sites triple to at least 370 by 2024, with a substantial 66% of these established in the post-coup period.
The relationship between Myanmar and China in the rare earth sector is complex and strategically profound. China, while dominating the global supply of refined rare earths by producing almost 90% of the world's total, has paradoxically also become the largest importer of raw rare earths, which are subsequently refined and processed domestically. Myanmar, its direct neighbor, has consequently become its most important country of origin for these critical imports. This dynamic is not merely transactional; it is deeply embedded in China's overarching raw materials strategy, which explicitly seeks to secure access to critical minerals beyond its borders and diversify its foreign supply sources.
Furthermore, the apparent contradiction of China’s global dominance in refined rare earth production alongside its status as the largest importer of raw rare earths reveals a sophisticated strategic approach. The evidence indicates that Myanmar primarily supplies heavy rare earth elements (HREEs), which are inherently scarcer and more valuable than their light rare earth counterparts. While China’s domestic production is substantial, it may be strategically conserving its own HREE deposits. This points to a deliberate raw materials strategy where China leverages foreign sources for specific, critical elements like HREEs to preserve its finite domestic reserves. This approach allows China to maintain its processing dominance without depleting its strategic reserves, effectively transforming Myanmar into a critical "secondary deposit" that serves China's long-term industrial and geopolitical objectives. This intricate relationship forms a central causal link in understanding Myanmar's pivotal role in the global rare earth landscape.
Myanmar's rare earth mining operations are almost exclusively concentrated in Kachin State, a region strategically located close to the border with China. The primary mining activity is centered around Chipwe and Pangwa, situated approximately 125 kilometers northeast of Myitkyina, the capital of Kachin State. This particular area is under the joint control of the Myanmar Army and the New Democratic Army-Kachin (NDA-K). Additionally, a smaller yet significant volume of mining occurs in Nhkawng Pa, located in Bhamo District along the China border, northwest of Mai Ja Yang. These sites are controlled by the Kachin Independence Organisation (KIO). The expansion of mining in these areas has been rapid and extensive, with over 2,700 mining collection pools identified in Kachin State by March 2022, covering an area roughly equivalent to the size of Singapore. This surge in mining activity is closely linked to the ongoing civil war that escalated after the 2021 coup, as both pro-junta and anti-junta ethnic armed groups (EAGs) have expanded their mining operations to generate crucial revenue.
Myanmar has become one of the world's largest suppliers of heavy rare earth elements (HREEs), contributing nearly half of the global production. This prominence is largely due to its unique geology, characterized by ion-adsorption clay deposits that are exceptionally rich in HREEs, a distinct advantage over many other global sources that predominantly contain light rare earths. These valuable deposits are typically found in areas subject to significant weathering processes, similar to certain regions in southern China. The most critical HREEs extracted from Myanmar are Dysprosium (Dy) and Terbium (Tb). Dysprosium is indispensable for enabling permanent magnets to function effectively at high temperatures. Its exceptionally high magnetic anisotropy field (170 kOe) allows magnets to maintain performance above 150°C, a crucial requirement for electric vehicle motors, wind turbine generators, and advanced military systems. Myanmar's ore boasts significantly higher concentrations of dysprosium (600-1,200 parts per million) compared to most alternative sources. Similarly, Terbium is vital for high-temperature permanent magnets and is even scarcer than dysprosium. It possesses a remarkable magnetic moment (58.4 µB when alloyed with iron), enabling the development of highly compact yet powerful magnetic components. Both dysprosium and terbium are essential for preventing the demagnetization of neodymium-iron-boron magnets at elevated temperatures, and despite decades of research, no viable substitutes have been found for these elements.
The rapid expansion of mining sites, particularly in the post-coup period, and the control of these areas by various armed groups, including the Myanmar Army, NDA-K, and KIO, clearly indicate that rare earth extraction is deeply interwoven with Myanmar's internal conflicts. These groups leverage mining operations as a vital source of revenue, effectively establishing a "conflict economy". This suggests that the very instability within Myanmar, far from hindering, paradoxically fuels the rare earth supply to China by providing a consistent revenue stream for armed factions. This creates a complex ethical dilemma for global supply chains, as critical materials are sourced from a conflict-ridden environment where human rights and environmental standards are frequently disregarded. The recent shift in control of mines to the KIO/A and their subsequent imposition of new export taxes further solidifies this "conflict economy" model, demonstrating how resource extraction serves as a strategic tool for non-state actors within the conflict.
The in-situ leaching process, as described, highlights a concerning model of environmental and social cost externalization. The severe contamination of land and water, abandonment of toxic sites, and rampant deforestation, coupled with profound social impacts such as sexual violence, increased drug use, and heightened community tensions, demonstrate that the true costs of extraction are disproportionately borne by local communities and the environment in Myanmar. This operational model enables China to secure critical raw materials at a lower direct cost, effectively shifting the significant environmental and social burdens to Myanmar. This allows China to maintain its global processing dominance while mitigating the environmental and health costs that would otherwise be associated with domestic mining. The result is a highly unsustainable and unethical supply chain, raising critical questions about corporate social responsibility and international accountability.
Myanmar has consistently been China's primary rare earth supplier, contributing over 60% of China's total rare earth imports between 2019 and 2024. On average, Myanmar accounted for nearly two-thirds of China's annual rare earth imports by volume from 2017 to 2024. From 2017 to 2024, Myanmar's rare earth exports to China collectively surpassed USD 4.2 billion. A substantial portion of this, USD 3.6 billion, occurred in the nearly four-year period following the 2021 coup, marking a fivefold increase in exports compared to the equivalent duration before the coup. In terms of volume, Myanmar exported over 290,000 tons of rare earth to China from January 2017 to December 2024, with more than 170,000 tons exported post-coup. The export value reached its peak in 2023, with USD 1.4 billion. In April 2025, imports of unlisted rare earth oxides from Myanmar saw a tenfold month-over-month increase, indicating robust activity despite the impending rainy season.
Myanmar's unique geological characteristics provide a compelling reason for China's reliance. The country possesses extensive ion-adsorption clay deposits. These deposits are particularly rich in heavy rare earth elements (HREEs), such as dysprosium and terbium, which are considerably scarcer and more valuable than light rare earths. Unlike many other global sources, Myanmar's mines yield high concentrations of these critical HREEs, with dysprosium concentrations, for instance, ranging from 600-1,200 parts per million. This makes Myanmar an indispensable source for these specific elements, which are vital for the high-performance permanent magnets used in advanced technologies. The absence of viable substitutes for these elements, despite decades of research, further cements Myanmar's critical role in the global supply chain.
By heavily relying on imports from Myanmar, China can strategically conserve its own finite domestic rare earth reserves. This represents a crucial long-term strategic maneuver designed to ensure future supply security and maintain global market control. This approach also allows China to manage the significant environmental and health costs that would otherwise be incurred from extensive domestic mining by expanding the importation of raw REEs from less regulated environments. This calculated strategy of "strategic conservation" through foreign exploitation is a key factor in Myanmar's role as China's primary supplier. China is not merely diversifying its supply but actively engaging in a process where the environmentally and socially intensive primary extraction of valuable HREEs is offloaded to Myanmar. This enables China to maintain long-term resource security and control over the downstream processing and manufacturing, reinforcing its global market dominance while effectively externalizing the negative consequences of mining to a nation characterized by less stringent regulations and ongoing conflict.
China's strategic imperative extends beyond mere raw material acquisition; it is fundamentally about solidifying its position as the global leader in rare earth processing and manufacturing. The raw HREEs extracted in Myanmar are exported directly to China for further refining and processing into magnetic components and other high-tech products. This ensures that China maintains its near-monopoly across the entire downstream value chain, from raw material extraction to finished product, supplying up to 90% of global demand for permanent magnets. European industries, for example, are heavily dependent on China for these processed components, underscoring China's comprehensive control over the entire supply chain.
Following China's strategic shift in 2012, there was a noticeable increase in the establishment of Chinese mining companies in Myanmar, particularly from 2014 onwards. These companies are often deeply involved in the entire rare earth supply chain within Myanmar, from prospecting and land acquisition to the actual extraction and export processes. Reports have indicated that some mining operations were predominantly controlled by armed Chinese groups, which has contributed to ecological damage in the region. Chinese site managers and technical workers are consistently present in Myanmar's rare earth mining areas, overseeing operations.
Myanmar has effectively become China's primary external source of dysprosium and terbium. In 2023, China imported approximately 41,700 tons of these critical raw materials from Myanmar, a quantity more than double its domestic quota for these elements. Furthermore, Myanmar's total mining output of these two heavy rare earth elements in 2023 doubled that of China's mines. This makes Myanmar, in essence, China's "secondary deposit" – a vital external reservoir that supplements and strategically conserves China's domestic resources. Despite the inherent political uncertainties and occasional supply chain disruptions, such as temporary export bans or pauses, the volume of rare earth exports from Myanmar to China has consistently grown. The uncertain duration of inspections and export bans, whether issued by the Myanmar government or by controlling ethnic armed groups, serves to underscore Myanmar's immense and irreplaceable importance to China's rare earth industry.