China has intensified its control over rare earth exports, leading to global shortages and highlighting industries’ heavy reliance on Chinese supply chains. Despite being the world’s leading producer of rare earths, China increasingly imports these materials, with Myanmar emerging as a crucial supplier. In 2022, about 57% of China’s rare earth imports came from Myanmar, a significant jump from previous years, with exports peaking at nearly 42,000 metric tons in 2023. Myanmar’s deposits are rich in heavy rare earth elements, such as dysprosium and terbium, essential for high-tech manufacturing in sectors like aerospace and renewables.
The mining of these rare earths in Myanmar predominantly occurs in the north, where, following China’s stricter environmental regulations, many extraction projects shifted there. Myanmar’s ionic adsorption clay deposits, farmed using environmentally detrimental leaching methods, have become integral to China’s supply chain. The rare earths mined are shipped to China for further processing.
However, this relationship has created supply chain risks. Since Myanmar’s military coup in 2021, stability in the region has declined, with the Kachin Independence Army gaining control over key mining areas, causing supply disruptions and price spikes. Experts warn that cessation of rare earth exports from Myanmar would significantly challenge China’s heavy rare earth supply. This has prompted Beijing to seek alternative sources in neighboring countries like Malaysia and Laos, although environmental regulations there might complicate future mining efforts. Past experiences with toxic waste from IAC operations in Southern China serve as a cautionary tale about the environmental impacts of expanding rare earth extraction projects.
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