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Illustration of the national flag of the People’s Republic of China and a mining site.
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Beijing has intensified controls on rare earth exports, triggered global shortages and exposing the dependence of industries with regard to Chinese supply chains.
However, in recent years, China itself has become dependent on rare land supply of an unexpected source: the relatively small economy torn by the Myanmar War.
While China is the best world producer of rare land, it is always important to raw materials containing the coveted metals from abroad.
Myanmar represented approximately 57% of total importance of rare land of China last year, said the CNBC, director of the Critical mineral security program at the Center for Strategic and International Studies.
According to Chinese customs data, exports from Rare Land from Myanmar to China have taken up considerably in 2018 and have reached a peak of almost 42,000 metric tonnes by 2023.
Baskaran added that Myanmar imports are also particularly high in contents in terms of rare earth elements, which are generally less abundant in the earth’s crust, raising their value and their rarity.
“The production of Myanmar has considerably strengthened the dominant position of China, effectively giving Beijing a de facto monopoly on the global supply chain of rare land – and a large part of the lever effect it has today.”
The country has become a key source of two rare lands, dysprosium and highly sought -after terbium, which play a crucial role in high -tech manufacturing, including in the defense and soldiers, aerospace and renewable sector.
“This dynamic has given birth to a supply chain in which the extraction is concentrated in Myanmar, while downstream treatment and added value is mainly carried out in China,” said Baskaran.
Why the Myanmar?
Myanmar is home to deposits that tend to have higher content of rare land, David Merriman, research director at Project Blue, told CNBC.
These “ionic adsorption” or IAC deposits are exploited by leachate methods which apply chemical reagents to clay – and which include high environmental costs.
According to Merriman, the vast majority of IAC global operations were in southern China from start to mid-2010. But, while Beijing began to implement new Environmental controls and standards In the rare earth industry, many of these projects have started to close.
“Myanmar, in particular the north of the country, was considered a key region which had a geology similar to many IAC deposit areas in China,” said Merriman.
“You started to see a fairly fast construction from new IAC mines in Myanmar, essentially replacing national Chinese production. There was a lot of Chinese commercial involvement in the development of these new IAC projects.”
The rare earths extracted by these IAC minors in Myanmar are then shipped in China mainly in the form of “rare earth oxides” for additional treatment and refining, told CNBC Yue Wang, principal consultant for rare earths in Wood Mackenzie.
In 2024, a report According to the global witness, a non -profit organization focused on environmental and human rights violations, said that China has effectively externalized a large part of its extraction of rare land in Myanmar “at a terrible cost for the environment and local communities”.
Risk of rare earths from China
China’s dependence on Myanmar for rare land has also opened it to the risk of the supply chain, experts said.
According to research from the global witness, most of the heavy rare lands of Myanmar come from the state of northern Kachin, which borders China. However, following a violent military coup from Myanmar in 2021, the military junta had trouble keeping control of the territory in the middle of the opposition of public and armed groups.
“Myanmar is a risky jurisdiction on which relying, given the current civil war.
Since the crisis, there have been reports of disturbances of the offer, causing peaks in the prices of certain rare heavy land. According to a reuters Report, KIA sought to use resources as a lever effect against Beijing.
Chinese customs data show that imports of Rare Lands from Myanmar have dropped more than a third in the first five months of the year compared to the same period last year.
“If Myanmar was to stop all exports of rare land food to China, China would find it difficult to respond to its rare heavy -term soil request,” said Merriman de Project Blue.
Unsurprisingly, Beijing has sought to diversify its rare land sources.
According to Merriman, there are IAC deposits in neighboring countries, notably Malaysia and Laos, where certain projects have been set up with Chinese involvement.
However, he notes that environmental standards should be higher in these countries, which will present challenges for rare earth minors.
China’s decision to reduce its own extraction of rare earth elements can serve as a warning to other countries concerning the development costs of these projects. A report By the Chinese media group, Caixin in 2022, documented how old IAC operating sites in southern China had left toxic water and contaminated soils, injuring the livelihoods of local farmers.
