INSIGHT: Myanmar rebels disrupt China rare earth trade, sparking regional scramble
When armed rebels seized northern Myanmar’s rare-earths mining belt in October, they dealt a blow to the country’s embattled military junta – and wrested control of a key global resource.
By capturing sites that produce roughly half of the world’s heavy rare earths, the Kachin Independence Army (KIA) rebels have been able to throttle the supply of minerals used in wind turbines and electric vehicles, sending prices of one key element skyward.
The KIA is seeking leverage against neighbouring China, which supports the junta and has invested heavily in rare earths mining in Myanmar’s Kachin state, according to two people familiar with the matter.
Chinese imports of rare earth oxides and compounds from Myanmar dropped to 311 metric tons in February, down 89% compared to the year-ago period, according to Chinese customs data that hasn’t been previously reported. Most of the fall came after October.
Reuters spoke to nine people with knowledge of Myanmar’s rare earths industry and its four-year civil war about turmoil in the mining belt.
One of them described the move by the KIA, which is part of a patchwork of armed groups fighting military rule, as an attempt to drive a wedge between the junta and China.
“They want to use rare earth reserves as a leverage in their negotiation with China,” said Dan Seng Lawn, executive director of the non-profit Kachinland Research Centre, which studies Kachin socio-political issues.
Three of the people also detailed previously unreported interest in the sector by India, China’s regional rival, which they said in late 2024 sent officials from a state-owned rare earths mining and refining firm to Kachin.
The KIA is one of the largest and oldest ethnic militias in Myanmar. It fights for the autonomy of the Kachin minority, a mostly Christian group who have long held grievances against the Bamar Buddhist majority.
The group has imposed a hefty tax on the mostly Chinese-operated rare-earth miners working around Panwa and Chipwe towns in Kachin, according Dan Seng Lawn, whose institute is based in the state, and a Chinese mining analyst.
China has been one of the staunchest international backers of Myanmar’s military since it deposed a civilian-led government in 2021 and ignited a bloody civil war. Beijing continues to see the junta as a guarantor of stability along its frontier, though the military has been ejected from most of the borderlands since a major rebel offensive in 2023.
A spokesperson for China’s Foreign Ministry said the department was not aware of the specifics of the situation in the mining belt but it continues to “actively promote peace talks and provide all possible support and assistance for the peace process in northern Myanmar.”
India’s external affairs ministry, the KIA and a junta spokesperson did not return requests for comment. Bawn Myang Co Ltd, which the US government previously identified as an operator of mines in the area, couldn’t be reached.
Price spike
Chinese spot prices of terbium oxide, whose supply is concentrated in Kachin, jumped 21.9% to 6,550 yuan per kg between late September and March 24, data from Shanghai Metals Market show.
Prices of dysprosium oxide, which is also largely mined in Kachin but was in lower demand over the last six months, eased 3.2% to 1,665 yuan per kg during the same period.
Most rare earths from Kachin are processed in China, so a protracted stalemate would have global implications.
“A prolonged shutdown would likely lead to higher, potentially more volatile rare earth prices in China, and a reshaping of market dynamics in the near term,” research firm Adamas Intelligence said in a February note.
Export plunge
Chinese miners started building up major operations in Kachin in the 2010s, after Beijing tightened regulations on domestic mines.
Kachin’s often unregulated mines steadily expanded after the 2021 coup with the tacit approval of the junta, according to the UK-based Global Witness non-profit.
But the growth came at a heavy cost, ravaging the environment and leaving Kachin’s hills pock-marked with leeching pools, according to witness accounts and satellite imagery.
Since the KIA’s takeover, a 20% tax imposed by the rebels has made it effectively impossible for local operators to run profitable mines.
The KIA wants China to stop pushing it to set down arms against the junta and to recognize the rebels’ de facto control of the border, said Dan Seng Lawn, adding that the parties had met at least twice in recent months.
The KIA has full control of the border in areas where it operates and anti-junta groups rule most of the rest of Myanmar’s frontier with China.
Beijing appeared reluctant to accept the KIA’s demands, though it risked its monopoly on Myanmar’s rare earth reserves if it doesn’t position itself pragmatically, Dan Seng Lawn said.
Reopening the minerals sector would be a major financial lifeline to the rebels: Myanmar’s heavy rare earths trade stood at around $1.4 billion in 2023, according to Global Witness.
The KIA has told miners in Kachin it will now allow shipments of existing rare earth inventories to China, Reuters reported Thursday.
But to resume operations at full capacity, the KIA needs an agreement with China, home to thousands of workers with the know-how, said Singapore-based rare-earths expert Thomas Kruemmer.
“Without them, this won’t work, full stop,” he said.
India alternative?
Amid the ongoing tussle, India has attempted to deepen its influence in Kachin, with which it also shares a border, according to Dan Seng Lawn and two people familiar with Indian official thinking.
India’s state-run mining and refining firm IREL in December sent a team to Kachin to study resources there, according to one of the Indian sources, who spoke on condition of anonymity due to the sensitivity of the matter.
Indian authorities have reservations about operating in an area with armed non-state actors, but the Kachin desire to diversify away from China and New Delhi’s need for resources have pushed the two parties to talk, the Indian source said.
IREL did not return requests for comment.
An Indian delegation that included IREL also held an online meeting with the Kachins in December to discuss their interest in reopening the rare-earths sector, said Dan Seng Lawn, who attended the discussion.
They were willing to pay higher prices than China, he said.
Any India deal faces multiple obstacles, said Kruemmer and Dan Seng Lawn.
There is only skeletal infrastructure along the mountainous and sparsely populated Kachin-India frontier, making it challenging for commodities to be moved from Myanmar to the neighbouring northeastern states of India. Those states are also far removed from India’s manufacturing belts in the south and west.
India also doesn’t have the ability to commercially process the heavy rare earths and transform them into magnets used by industry, according to Kruemmer and the Indian source.
Some 90% of the world’s rare earths magnets are produced in China, which has brought the sector under tighter state control, followed by Japan.
Nevertheless, if Beijing does not recognize the “changing power dynamics,” Dan Seng Lawn said, the KIA “will have to open alternative options.”
(By Devjyot Ghoshal, Poppy McPherson, Amy Lv, Neha Arora and Shoon Naing; Editing by Katerina Ang)
Myanmar: Arakan Army To Begin Conscription In West
Members of the Arakan Army. Photo Credit: Arakan Army
By RFA
One of Myanmar’s most powerful rebel armies will begin conscription for all residents over 18 years old, sources told Radio Free Asia on Thursday.
The Arakan Army, or AA, which controls the vast majority of western Myanmar’s Rakhine State, is organizing administrative processes in the state that would make conscription a legal obligation, a source close to the AA told RFA, adding that details would be released soon.
A resident from the state’s Mrauk-U township also confirmed that the AA was holding meetings in villages to discuss details about the conscription.
“Men between the ages of 18 and 45 will undergo two months of military training and be required to serve for two years,” the resident said, speaking on condition of anonymity for security reasons.
He added that women between the ages of 18 and 35 will also be required to serve.
No information has been released about what draftees will be required to do or whether they will serve in combat, raising concerns among civilians in the embattled region, which has witnessed brutal retaliation efforts from Myanmar’s junta.
The AA currently controls 14 of Rakhine state’s 17 townships.
RFA contacted AA spokesperson Khaing Thu Kha for more information, but he did not respond by the time of publication.
With a well-organized military structure and strong local support, the AA has established de facto governance in much of the region, collecting taxes and administering justice independently from the central government.
The junta views the AA as a persistent threat, as its growing influence undermines military control and fuels aspirations for greater autonomy among other ethnic groups.
Facing serious setbacks from insurgent groups across the country, reduced foreign investment, and defections from its own troops, the junta enacted controversial conscription laws in February last year, mandating compulsory military service for men aged 18 to 35 and women aged 18 to 27.
International human rights organizations have strongly criticized junta’s conscription law, arguing that it exacerbates the country’s existing humanitarian crisis and violates fundamental human rights.
The United Nations Special Rapporteur on Myanmar, Tom Andrews, described the junta’s imposition of mandatory military service as a sign of its desperation and a further threat to civilians.
The enforcement of this law has led to a significant exodus of young people seeking to evade conscription. Reports indicate that thousands have fled across borders, particularly into Thailand, to avoid mandatory military service.
Radio Free Asia’s mission is to provide accurate and timely news and information to Asian countries whose governments prohibit access to a free press. Content used with the permission of Radio Free Asia, 2025 M St. NW, Suite 300, Washington DC 20036.
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