Low-cost Myanmar rare earths feed China as border mines pollute Thailand

Asia News Network

17-07-2025

July 17, 2025
BANGKOK – When talking about Rare Earth Elements (REEs), a group of 17 essential metals used in high-tech applications ranging from smartphones to missiles, the global focus often shifts to China, the dominant player in the market.
China controls 90% of the global rare earth processing market and leads in reserves, holding approximately 44 million tons in 2024—almost half of the world's known reserves, which total over 90 million tons.
In contrast, the United States holds only 1.9 million tons in rare earth reserves and continues to rely heavily on imports. Other countries with significant reserves include Brazil (21.0 million tons), India (6.9 million tons), Australia (5.7 million tons), Russia (3.8 million tons), and Vietnam (3.5 million tons), according to estimates from the USGS for the same year.
Interestingly, Myanmar is not listed among the countries with the largest rare earth reserves, despite intensive mining activities, especially in Shan and Kachin states.
This clearly indicates that while Myanmar may 'produce' rare earth minerals, it does not 'own' the resources. It serves primarily as a transit point for initial extraction, with the minerals being sent to other countries, particularly China, for further processing.
Myanmar Border Mines Surge
The true source of China's rare earth dominance lies in Myanmar's border regions, where Shan and Kachin states are emerging as key centres for the mining of rare earth elements like terbium and dysprosium. These areas are experiencing rapid and uncontrolled growth in mining activities.
In Shan State, rare earth mining has proliferated, particularly in the town of Poke, which falls under the influence of the United Wa State Army (UWSA). The number of mines has increased from just 3 in 2005 to 26 in 2025, an eightfold growth in just one decade. The mining technique used, 'ore leaching,' has led to chemical runoff contaminating major water sources, including the Kok and Sai rivers, which flow into northern Thailand.
In the northern part of Myanmar, Kachin State, areas like Pang Wa, Manse, Momok, and Loy Ja have become intensive mining zones. In 2023, over 300 mines were operating, with more than 3,000 extraction pits. After the 2021 coup, production surged by 40%, and China purchased 41,700 tons of rare earth minerals from Myanmar within the same year.
China's Investments in Foreign Mining Operations
Interestingly, the process in Myanmar's Shan and Kachin states is not just about mineral extraction, but also reflects politics, ethnic relations, and the influence networks of China. Most mines are operated by armed groups or are supported by Chinese capital, with minimal oversight on environmental protection or human rights.
China has strategically chosen to invest in rare earth mining abroad, particularly in Myanmar, as the Chinese government has tightened domestic regulations for several strategic reasons, including economic, environmental, and geopolitical factors. Moreover, China has declared that rare earth minerals are state-owned, and private entities have no right to claim them.
Myanmar has become a target for private investors due to its relatively low regulation and enforcement, making it an attractive location for shifting polluting activities abroad. Meanwhile, processing and value-added operations remain in China.
Additionally, mining costs in Myanmar are significantly lower. According to Benchmark Mineral Intelligence, the cost of producing heavy rare earth elements like dysprosium and terbium in Myanmar is seven times cheaper than in China. This lower cost structure enables Chinese companies to compete more effectively in global markets, particularly in the electric vehicle and wind energy industries.
Mines, Chemicals, and Rivers
Pianporn Deetes, Director of Southeast Asia Campaigns at International Rivers, stated in an interview with Bangkok Business that the cross-border pollution crisis is severely impacting millions of people in Chiang Rai, who are facing risks to their lives and health due to heavy metal contamination, particularly arsenic, in the Kok River, which flows into the Mekong and Sai rivers.
'Local residents can no longer engage in traditional activities like fishing or operating tour boats, and farmers are worried that rice grown using water from the Kok River may be contaminated with arsenic, as rice tends to absorb arsenic well. Additionally, there have been reports of fish with unusual parasites, which correlate with mining activities disturbing the soil.'
Pianporn criticised the Thai government's response as 'slow,' urging them to acknowledge this as the largest cross-border pollution crisis Thailand has ever faced and to take immediate action. 'The only solution is to halt mining activities.'
She further called for the Thai government to urgently negotiate with Myanmar and China, using various measures, including economic, diplomatic, and even food-related pressures, to halt mining activities. 'If the soil continues to be disturbed and mining continues, the people of Chiang Rai will be 'slowly dying.' The restoration of rivers contaminated with heavy metals is extremely difficult and time-consuming, as seen with the unresolved issue of the Klity Creek contamination, which has persisted for over 30 years.'