BANGKOK/YANGON — Armed rebels are taking control of key rare-earth mining areas in Myanmar, a development that could disrupt supply chains for electric vehicles and more that pass through China.
The Kachin Independence Army (KIA) had wrested control of Chipwi and Tsawlaw, both critical mining hubs, from the military regime’s Border Guard Force Battalion by early November.
The KIA also occupied Pangwa shortly after officials from its political arm met Deng Xijun, China’s special envoy for Asian affairs, in mid-October, when Deng reportedly urged the group to cease its resistance against Myanmar’s military regime.
China in response has blocked shipments passing through KIA-controlled areas. The rebel army said it launched a team to manage mining operations, though its future plans are unknown.
Myanmar accounted for 11% of the world’s rare-earth production in 2023, behind only China at 68% and the U.S. at 12%, according to the U.S. Geological Survey. Reserves of dysprosium and terbium in particular, which are used in EV motors, are concentrated in Myanmar and China.
But Myanmar lacks in refining capacity. The majority of its rare earths are sold to companies in China, which are capable of processing large amounts of materials for export to third countries.
Rare-earth development has rapidly accelerated in Myanmar amid its political turmoil. Its exports of heavy rare-earth oxides to China jumped to 41,700 tonnes in 2023 from 19,500 tonnes in 2021, according to international nongovernmental organization Global Witness.
With Myanmar responsible for 57% of global dysprosium and terbium supply in 2023, protracted disruptions will squeeze supply to magnet makers, Canadian research company Adamas Intelligence said in an October report.
Myanmar also ranks second in the world in the production of tin ore. International prices of tin, used to solder electronic devices, surged after mining operations were suspended in Myanmar’s Wa State in August 2023.
An anti-military offensive that began in October 2023 in Shan State has triggered an uptick in armed resistance across Myanmar, with many rebel groups targeting nickel and copper mines that help fund the military regime. The Ta’ang National Liberation Army, based in Shan State, has occupied the ruby mining town of Mogok near Mandalay.
Given China’s friendly stance toward Myanmar’s military regime, speculation has risen that Beijing could eventually intervene in the situation.
source : asia.nikkei