How Myanmar's rare earth elements reshape China’s supply chain

When Myanmar’s civil war is discussed, attention usually turns to the 2021 military coup, the Tatmadaw and the numerous ethnic armed organizations operating across the country. Yet, the war in the country’s north has another, less visible dimension with implications far beyond Myanmar, and that is rare earth elements. Essential to electric vehicles, wind turbines, electronics and defense technologies, these minerals have become increasingly important in U.S.-China strategic competition. Yet, one critical link in China’s supply chain lies just across its southern border.

According to the U.S. Geological Survey (USGS), Myanmar accounted for about 7.1% of global rare earth mine production in 2024, ranking fourth worldwide, and exported around 27,000 metric tons to China. Its importance, however, lies less in volume than in the type of rare earths it produces. Rare earths are a group of 17 elements, but they are not all equally significant from a strategic perspective. Myanmar is a key source of heavy rare earths, particularly dysprosium and terbium, which are crucial for high-performance permanent magnets used in electric vehicle motors, wind turbines and advanced defense systems.

China dominates the global rare earth industry. In 2024, it accounted for more than 70% of global mining and approximately 87% of processing capacity. Its share in processing dysprosium and terbium approached 100%. But this dominance does not mean China extracts all the raw materials it needs domestically.

For heavy rare earths, Myanmar has become an important external source. The heart of Myanmar’s heavy rare earth industry lies in Kachin State, bordering China’s Yunnan province. Mining expanded rapidly after the 2021 military coup. According to satellite-based research by Global Witness, the number of mining sites in Kachin Special Region 1 increased by more than 40% between 2021 and 2023, surpassing 300. China’s imports of heavy rare earth oxides from Myanmar more than doubled from 19,500 metric tons in 2021 to 41,700 in 2023, when Myanmar’s rare earth exports were worth about $1.4 billion.

Changing balance at border

Yet, the military balance was changing in precisely this production hub. The Kachin Independence Army (KIA), one of Myanmar’s most powerful ethnic armed organizations, has fought the central government for decades. Its late-2024 advances gave it new strategic importance. The KIA captured Chipwi and Pangwa near the Chinese border, gaining control over much of the major heavy rare earth mining zone previously held by the New Democratic Army-Kachin, a militia aligned with Myanmar’s military. A territorial shift in the civil war therefore also changed control over a critical link in a global supply chain.

The effects quickly became visible. By February 2025, China’s rare earth imports from Myanmar had fallen 89% year-over-year, while the price of terbium rose by around 22%. According to industry estimates cited by Reuters, the mines that fell under KIA control had previously supplied roughly half of the world’s heavy rare earths. The takeover, however, did not permanently halt exports. After a sharp decline in early 2025, shipments to China resumed. What changed were the political and economic conditions governing the trade. The Kachin Independence Organization (KIO), the KIA’s political wing, began taxing mining activities and exercising greater regulatory authority over companies in areas under its control.

By 2026, this role had become more institutionalized. The KIO introduced a 14-point set of regulations for Chinese rare earth companies around Pangwa and Chipwi, covering land rehabilitation, contaminated water, workers’ rights and industrial waste. The KIA/KIO is therefore no longer merely an armed organization controlling mineral-rich territory. It is increasingly acting as a de facto economic authority influencing who can operate, under what conditions, and how activities are taxed.

This does not mean China has lost access to Myanmar’s rare earths. Geography binds the two sides together. Almost all heavy rare earth material extracted in Kachin is transported overland into China, which has the industrial infrastructure to separate, refine and transform it into high-performance magnets. The KIA therefore needs China as well. Control over the mines does not give the KIA unlimited leverage over Beijing. China retains powerful instruments through border access, markets, processing capacity and trade. Yet the relationship is no longer entirely one-sided.

According to the Stimson Center, approximately 80% of the rare earth mines opened in Myanmar since 2022 are located in Kachin State, while Myanmar supplied at least 60% of China’s rare earth imports between 2017 and 2024. The real consequence of the civil war for China, therefore, is not the disappearance of supply but a change in the political actors who determine access to it. Previously, Beijing could largely manage its border mining interests through Myanmar’s central authorities and military-aligned militias. Today, it must also account for the KIA/KIO’s effective territorial control. For the KIA, influencing the flow of a strategic commodity into China provides limited but tangible leverage.

Nor is the issue confined to Kachin. Satellite-based research published in 2026 identified new rare earth mining sites in neighboring Shan State, including areas controlled by the Ta’ang National Liberation Army (TNLA). This development points to a broader transformation in Myanmar’s conflict economy. Ethnic armed organizations are no longer simply military forces controlling territory, populations and border crossings. In some areas, they are becoming economic actors governing strategic resources connected to global supply chains. Meanwhile, intensified military operations in strategic parts of Kachin in 2026 show that the struggle over territory and resources remains unsettled.

Impact on global supply

Myanmar’s wider geopolitical significance becomes clear here. Control of a remote Kachin town may seem like a local issue. Yet dysprosium and terbium extracted there cross into China, where they become high-performance magnets for electric vehicles, wind turbines, electronics and defense industries. A change on the battlefield in Kachin can therefore reverberate through industrial supply chains thousands of kilometers away.

This connection matters even more as strategic competition between Washington and Beijing intensifies. The United States and other countries are seeking alternative rare earth supply chains, but China remains central to heavy rare earth processing. Disruption to China’s access to raw materials can therefore affect global industries that depend on materials processed there. Myanmar illustrates a broader reality of the critical minerals era: supply-chain power cannot be measured only by reserves or processing technology. Political stability where raw materials are extracted, and, crucially, who controls those territories, matters as well.

The KIA’s takeover of much of Kachin’s rare earth mining belt did not end China’s access to Myanmar’s supplies. It changed the political order through which that access is negotiated. China remains the stronger economic and technological actor, but local forces controlling mining areas are seeking to capitalize on their position at a difficult-to-replace point in the global supply chain.

Myanmar’s rare earth story is therefore more than another chapter in its civil war. As critical minerals become increasingly important to the energy transition, advanced technologies and defense industries, conflicts in seemingly remote regions are becoming directly connected to global geopolitical competition. Kachin is one of the clearest examples.

In the geopolitics of critical minerals, it is no longer enough to ask where the resources are located. An equally important question is: Who controls the road to them?