Myanmar's Rare Earth Boom Fuels China's Supply Chain and a Growing Pollution Crisis

A global technology supply rooted in Myanmar's conflict zones

Myanmar supplied about 60% of the world's output of dysprosium and terbium in 2023, two metals that help power electric vehicles and wind turbines. In Kachin Special Region 1, more than 300 mines and 3,000 extraction pits were operating that year. Mining sites had increased by more than 40% in just two years, turning parts of the country's borderlands into a major source of materials for China's rare earth industry.

China controls about 90% of global rare earth processing. Its factories turn minerals extracted in Myanmar into materials used in products ranging from smartphones to missile guidance systems. Myanmar's growing role connects some of the world's most advanced technologies to landscapes affected by civil war, chemical pollution and weak oversight.

Rare earth elements are a group of 17 metallic elements used in modern technology. Heavy rare earth elements, including dysprosium and terbium, are particularly important for permanent magnets used in electric vehicles and wind turbines. Mining provides the raw material; processing turns it into forms manufacturers can use. China dominates that second stage even when the minerals come from across its border.

As of July 28, 2025, this supply chain faces pressure from several directions. Armed groups compete for mining territory inside Myanmar, communities report damage to water and farmland, and contamination has spread into Thailand. China's restrictions on rare earth exports have also disrupted manufacturing in Japan, the United States and Europe. The same minerals are therefore at the center of an environmental crisis, a conflict economy and an international trade dispute.

How mining moved from Jiangxi to Myanmar

China's southern Jiangxi province was a center of rare earth mining for decades. Acid leaching and chemical runoff poisoned soil and waterways, prompting Beijing to tighten environmental regulations. Those restrictions increased pressure on a mining industry supplying materials for consumer electronics, renewable energy equipment and military systems.

Chinese companies then expanded extraction across the border into Myanmar, where conflict and weak governance made environmental oversight far less effective. The shift allowed China to reduce pollution from domestic mining while retaining the refining and magnet production stages that add value to the minerals.

Myanmar's production costs help explain the expansion. Producing heavy rare earths there can be up to seven times cheaper than in China, thanks to lax regulation and minimal oversight. The financial benefit comes alongside costs borne by communities whose rivers, forests and agricultural land are exposed to mining waste.

Myanmar is not listed among the world's top countries for rare earth reserves, despite its intensive mining activity. Its role in this supply chain is concentrated in initial extraction and the shipment of minerals to China for further processing. China retains the industrial stages that turn those materials into more valuable products.

A mining boom accelerated by war

Myanmar's military coup in 2021 was followed by civil war, with the junta, ethnic militias and resistance groups competing for territory rich in natural resources. Chinese companies expanded mining in Kachin and Shan states, often working through local proxies or with support from armed groups.

Global Witness documented that Chinese imports of heavy rare earths from Myanmar more than doubled between 2021 and 2023. Its rare earth investigation describes the expansion that made Myanmar China's largest external source of these materials. The growth in imports accompanied the spread of extraction sites across Kachin's hills.

Satellite imagery showed the number of mining sites in Kachin Special Region 1 increasing by more than 40% over two years. The more than 300 mines and 3,000 extraction pits operating in 2023 show how widely extraction had spread. The boom supplied minerals for global manufacturing while placing the immediate environmental burden on communities near the mines.

The main developments span several years:

• 2010: China's rare earth embargo against Japan demonstrated the political power attached to control of supply.
• 2021: Myanmar's military coup was followed by civil war and expanding competition over resource territories.
• 2021 to 2023: Chinese imports of heavy rare earths from Myanmar more than doubled.
• 2023: Myanmar supplied about 60% of global dysprosium and terbium output, while Kachin Special Region 1 had more than 300 mines and 3,000 extraction pits.
• Late 2024: The Kachin Independence Organization/Army captured key mining areas in Kachin state.
• April 2025: Beijing sharply limited exports of heavy rare earths, disrupting manufacturers abroad.

How chemicals extract the minerals

Myanmar's mines mainly use in-situ leaching. Chemicals are injected into the earth to dissolve rare earth minerals, allowing the dissolved material to be collected in liquid form. The solution is gathered in ponds and processed into rare earth oxides, which are then sent onward for further processing.

Ammonium sulphate and oxalic acid, mostly imported from China, are among the chemicals used. The method is cheap and efficient, but chemical runoff and mining waste can spread into nearby land and water. Forests are stripped away, rivers turn red and biodiversity is damaged.

Local residents report contaminated water, losses of fish and crops, and health problems including skin diseases and respiratory issues. Some experts warn that continued unchecked mining could leave parts of Kachin and Shan states uninhabitable. For families dependent on farming and fishing, damage to water and soil also threatens their ability to earn a living.

Lahtaw Kai, an activist in Kachin state, described the effects on rivers, wildlife and residents, and accused mining companies of putting extraction ahead of local welfare:

The rivers are turning red, the fish are dying, and people are getting sick. The mining companies don't care—they just want the minerals.

Arsenic and other heavy metals contaminate the Kok and Mekong rivers, creating health risks beyond the immediate mining areas. Water carries the consequences downstream, connecting extraction in Myanmar with communities in Thailand's Chiang Rai province.

Who controls the mines and their income?

Military aligned militias initially dominated the rare earth trade after the 2021 coup. Control of mines provided revenue for armed actors in a country already divided by conflict. By late 2024, the Kachin Independence Organization/Army, known as the KIO/A, had captured key mining zones in Kachin state.

The KIO/A is a longstanding resistance group. Its seizure of mining areas changed who controlled an important source of minerals and income. Those disruptions caused rare earth prices to spike, showing how shifts in territorial control inside Myanmar can affect buyers far beyond the country.

In Shan state, the United Wa State Army, or UWSA, protects new mining operations and controls export routes to China. The group has close ties to Beijing. Its role illustrates how armed organizations can influence both extraction and the movement of minerals across the border.

Chinese companies often operate through local proxies or joint ventures with armed groups. They pay taxes or protection fees in exchange for access to mineral deposits. Profits flow to armed leaders, militias and foreign investors, while nearby communities carry the environmental and social costs.

The New York Times described the relationship between wartime disorder and Chinese companies' access to Myanmar's minerals:

In the chaos of war, there's nothing to stop Chinese firms from ravaging the landscape and extracting the minerals, which end up in China.

Communities lose land as extraction expands

Indigenous communities have been displaced from ancestral lands, and areas traditionally used for farming have been transformed into polluted mining zones. The loss reaches beyond income: people are separated from land tied to their communities and cultural heritage.

The Business and Human Rights Resource Center has documented forced relocations, labor abuses and the destruction of cultural heritage sites. The rare earth rush has also been accompanied by increases in drug use and crime in Myanmar's borderlands.

Weak oversight leaves residents with little protection or accountability when mining damages their land or livelihoods. Armed control of territory, company arrangements with local proxies and the wider civil war make these areas part of a shadow economy in which those exposed to pollution have little influence over extraction.

Thailand faces pollution flowing across the border

Thailand's Chiang Rai province is affected by chemical runoff and heavy metal contamination flowing from Myanmar. Pollution in the Kok and Sai rivers threatens the health of millions and has disrupted livelihoods based on fishing and rice farming.

Pianporn Deetes, Director of Southeast Asia Campaigns at International Rivers, described the scale of the crisis and called for mining to stop:

This is the largest cross-border pollution crisis Thailand has ever faced. The only solution is to halt mining activities.

Restoring rivers contaminated with heavy metals is difficult and takes time. Farmers and fishing communities face damaged water resources, while fears that contaminated rice could enter the food supply extend concern beyond people living directly beside the rivers.

The Thai government's response has been slow, prompting calls for urgent diplomatic action with Myanmar and China. The pollution crosses national boundaries, while the mines, transport routes and processing facilities sit under different authorities. Addressing the crisis therefore requires action beyond Thailand's own riverbanks.

Export restrictions reach factories worldwide

China's control of about 90% of global rare earth processing gives Beijing substantial power over international supply. Heavy rare earths such as dysprosium and terbium are important to advanced manufacturing, so restrictions on their export can affect factories that are far removed from the mines.

In April 2025, Beijing sharply limited exports. The restrictions caused shutdowns at Suzuki assembly lines in Japan, Ford plants in the United States and several European suppliers. Dependence on these materials became an immediate production problem for companies outside China.

Rare earths are also used in advanced military systems, including missile guidance equipment. Their role in both civilian technology and defense makes access a national security concern for the United States, the European Union and other major economies.

An analyst quoted in The Diplomat described China's position in the supply chain:

China has positioned itself as the gatekeeper of these crucial resources.

China's ability to use rare earth controls in trade disputes recalls its 2010 embargo against Japan. The stakes have grown as countries pursue renewable energy and advanced technologies that rely on these materials. Control over processing gives Beijing influence even when part of the mining occurs outside its territory.

Why replacing this supply is difficult

Myanmar's importance to heavy rare earth production creates a supply chain vulnerable to conflict, political instability and environmental damage. The KIO/A's capture of mining territory in late 2024 and the resulting price spike showed the connection between local fighting and the cost of materials for international manufacturers.

Major automakers and wind turbine manufacturers are increasingly concerned about environmental and ethical risks in their supply chains. Minerals extracted in Myanmar pass through Chinese processing before reaching wider manufacturing networks, carrying the risks associated with their origin into global production.

Projects to develop alternative rare earth sources are underway in Laos, Malaysia, Australia and the United States. These efforts face technical, economic and regulatory difficulties. Building another source of supply involves extraction and the processing capacity needed to make the minerals usable.

Recycling remains limited. Most recycled rare earth material comes from manufacturing waste rather than products that have reached the end of their useful lives. Recovering material from factory waste therefore provides only a partial response to the demand currently met by new mining.

Environmental groups and activists are calling for unregulated mining in Myanmar to stop until proper safeguards are in place. Their recommendations include transparent and responsible supply chains, requirements for companies to investigate how their minerals are obtained, investment in recycling and alternative technologies, and targeted sanctions against companies involved in environmental destruction and human rights abuses.

Due diligence means companies checking the conditions under which materials are produced, including risks to people and the environment. The call for such checks connects decisions made by manufacturers and buyers with the conditions faced by communities around Myanmar's mines.

No timetable is given for halting unregulated extraction or putting those safeguards in place. Continued mining threatens further environmental destruction, polluted land that communities may no longer be able to inhabit, and income streams that help sustain armed conflict.

The Bottom Line

• China shifted much of its polluting rare earth extraction to Myanmar while retaining refining and magnet production.
• Myanmar supplied about 60% of global dysprosium and terbium output in 2023.
• Kachin Special Region 1 had more than 300 mines and 3,000 extraction pits in 2023, after mining sites increased by more than 40% over two years.
• Chemical extraction has damaged water, forests, farmland and livelihoods, with pollution reaching Thailand.
• Militias and ethnic armed groups earn revenue from mining and control important territory and export routes.
• China controls about 90% of global rare earth processing, and its April 2025 export restrictions disrupted overseas factories.
• Alternative supplies and recycling remain limited, while activists seek mining safeguards, corporate checks and targeted sanctions.