Myanmar’s Kachin Independence Army (KIA) has seized control of northern mining regions producing half the world’s heavy rare earths, disrupting China’s supply chain and triggering a scramble for influence involving regional rival India. The rebel group’s October takeover of Kachin state’s rare earth belt—critical for EV motors, wind turbines, and defense tech—has slashed Chinese imports from Myanmar by 89% (to 311 tons in February) and sent terbium oxide prices soaring 22% since late 2023.
Key Developments:
Strategic Leverage: The KIA imposed a 20% tax on Chinese miners, aiming to pressure Beijing to halt support for Myanmar’s military junta and recognize rebel-held border zones.
Price Volatility: Terbium oxide prices surged to 6,550 yuan/kg, while China’s rare earth processing dominance faces threats from prolonged supply halts.
Environmental Toll: Unregulated mining has left Kachin’s landscape scarred with toxic leeching pools, per satellite imagery and witness accounts.
Regional Rivalry:
India’s Gambit: State-owned IREL explored rare earth deals with the KIA in late 2024, offering higher prices than China. However, infrastructure gaps and lack of processing capacity hinder India’s bid to rival China’s 90% global rare earth magnet production.
China’s Dilemma: Beijing, which backed Myanmar’s junta post-2021 coup, risks losing its monopoly if it fails to negotiate with the KIA.
Global Impact:
A protracted stalemate could reshape rare earth markets, inflate prices, and force industries to seek alternative suppliers. Analysts warn of “volatile prices and reshaped market dynamics” (Adamas Intelligence).