ミャンマーのレアアース供給の混乱は、数カ月続く可能性がある

Exports to China down steeply

As noted by Adamas in late October, the Kachin Independence Army (KIA) has taken control of key rare earth mining areas in Myanmar’s Kachin State, particularly around the towns of Pang War (aka Pangwa) and Chipwi.

The KIA captured Pang War, the largest rare earth mining center in Myanmar, on October 18, 2024, and completed its takeover of the Kachin Special Region 1, including Kan Pike Tee, a month later on November 20, 2024.

Consequently, most rare earth mining activities in Kachin State have been suspended since late 2024 and concentrate exports from Myanmar to China have fallen steeply as a result.

China closes border, cuts off electricity, fuel, chemical shipments

Following the KIA’s takeover, China imposed a trade embargo on Myanmar, closing six border gates and cutting off electricity, fuel, chemicals, and other essential goods needed for mining operations. This embargo was a response to the KIA’s control and aimed to pressure insurgent groups into peace talks.

In response, the KIA sealed the border under its control, halting cross-border shipments of inputs for rare earth mining and exports of the minerals back to China. This action effectively stopped rare earth trucks from crossing into China, particularly at the Pang War border crossing.

Mining has “shut down almost completely”

According to Frontier Myanmar, mining has “shut down almost completely” in recent months due to the change in territorial control and the subsequent Chinese border shutdowns.

The KIA has stated it is focused on managing the captured towns and has no current plans for rare earth mining or other economic activities, indicating a pause in mining operations under their control.

Prior to the shutdown, the rapid expansion of unregulated rare earth mining in Kachin State, especially in areas like Chipwi and Pang War, had caused significant environmental damage (e.g., deforestation, polluted water, landslides) and health issues for local communities.

The KIA’s control and the subsequent halt could potentially allow for reassessment of these practices, though no specific plans for environmental regulation or mining resumption have been outlined to our knowledge.

The near-term future of rare earth mining in Kachin State remains uncertain. The KIA’s long-term strategy for managing these lucrative mines is unclear, with some suggesting they might seek quick revenue from these assets to fund their operations.

As of today, it’s highly likely that rare earth mining operations in Kachin State remain largely suspended or throttled back due to the ongoing border closures, KIA control, and lack of stated plans to resume mining. The situation could remain in this holding pattern through the end of Q1 until (and if) new agreements with China are established, or until (and if) the junta retakes control of the mines and borders.

Prolonged shutdown may add support for heavy rare earth prices

With Myanmar responsible for upwards of 50% of global heavy rare earth mine production each year (all of which is processed in China), a prolonged shutdown would significantly disrupt China’s supply of heavy rare earths, adding support for a rise in prices.

ミャンマーで過去に発生した供給混乱は、すでに価格の高騰を招いている。例えば、2023年9月には、検査のためカチン州で採掘が一時停止されたことを受け、中国の希土類価格が20カ月ぶりの高値を記録した。

Similarly, the KIA’s takeover in October 2024 and subsequent border closures have already driven prices higher, with dysprosium and terbium oxide prices rising in late 2024. A sustained shutdown would exacerbate this trend, likely pushing prices even higher due to the prolonged scarcity of supply.

China might respond by increasing domestic production or importing more from alternative sources like Laos, but these measures would be insufficient in the short term.

In the context of the current geopolitical landscape, China could also opt to restrict exports, impacting global industries reliant on rare earths while maintaining upward pressure on domestic prices.

Overall, a prolonged shutdown would likely lead to higher, potentially more volatile rare earth prices in China, and the reshaping of market dynamics in the near term.

Tracking Industry Profits

今月から、当社の情報サービス「EVモーター材料月報」を通じて、中国の主要メーカーの収益性を追跡できるようになりました。

Follow the pinch and swell of profits to help anticipate potential movements in prices.

The EV Motor Materials Monthly is a must-have intelligence service for automakers, motor makers, magnet manufacturers, miners, explorers, investors, and other stakeholders with a professional interest in the EV, motor, magnet or rare earth industries.