In October, Myanmar’s Kachin Independence Army (KIA) rebels took control of a key rare earth mining region in the country’s north, dealing a setback to the ruling military junta and disrupting global supply chains. The seized area produces about half of the world’s heavy rare earths—critical materials for wind turbines and electric vehicles—causing a surge in prices, particularly for terbium oxide.
The KIA, one of Myanmar’s largest ethnic militias, is leveraging these resources in negotiations with China, which supports the junta and has heavily invested in rare earth mining in Kachin state. Chinese imports of Myanmar’s rare earth materials have plummeted by 89% since February, according to customs data. Sources say the rebels aim to weaken ties between China and the junta.
India, China’s regional competitor, has shown interest in Myanmar’s rare earth sector. In late 2024, officials from India’s state-owned mining firm IREL visited Kachin to explore potential opportunities. Though India lacks the infrastructure and refining capacity to fully process these materials, its willingness to pay higher prices has made it an attractive alternative partner for the KIA.
Following the junta’s 2021 coup, rare earth mining in Kachin expanded with little regulation, leading to severe environmental damage. After taking control, the KIA imposed a 20% tax on mining operations, making it unprofitable for many Chinese miners. The rebels have since allowed limited exports of existing stockpiles to China but require an agreement with Beijing to fully restart production.
China faces a dilemma: refusing to acknowledge the KIA’s authority risks losing its dominant position in Myanmar’s rare earth sector. Meanwhile, the rebels seek recognition of their control and an end to China’s pressure to disarm. If China does not adapt to the new power balance, the KIA may deepen its engagement with India as an alternative partner.
