Fractured Authority and Resource Politics in Myanmar: New Report on Rare Earth Mining

The European Union defines a critical raw material as a “raw material of high economic importance for the EU with a high risk of supply disruption due to their concentration of sources and lack of good, affordable substitutes”.1The global importance of certain raw materials is undeniable and a large portion of critical minerals can be found in Southeast Asia as the Heinrich-Böll-Stiftung Southeast Asia Office’s dossier “Treasures and Tragedies: Narratives and Discourses on Critical Minerals in Southeast Asia” explains. Heavy Rare Earth Elements (HREE) are a sub-group of minerals essential to a wide range of modern technologies and products. They are used in many things from capacitors in advanced computer chips2 to semiconductors in LED lights3. Crucially, HREEs are also key to the production of permanent magnets – an important component for many electric vehicles, wind turbines and even fighter jets4.

Production in China, mining in Myanmar

Globally, the large majority of these permanent magnets are manufactured in China, which dominates the market with the world’s largest processing and production facilities supplying up to 90% of global demand. While some of the raw materials are mined domestically in China too, a significant portion is imported – often unknown to purchasing companies and end users – from a country lesser known on the global stage: Myanmar. In 2023, around 60% of the global supply of two of these HREEs, Dysprosium and Terbium, originated from Myanmar. In fact, Myanmar’s total mining output of these two elements doubled that of China’s own mines.5

The mines in civil-war torn Myanmar are located in its Northernmost state Kachin – along the 2.192 kilometers long border Myanmar shares with China. Until recently, the mines were controlled by militias aligned with the military junta that overthrew Myanmar’s elected government in February 2021. However, since late 2024, control has shifted. The long-standing resistance group Kachin Independence Organization/Army (KIO/A)  captured the mines and controls the excavation and trade of these critical minerals now.

Also a question of environmental justice

A new research report published by the Shanan Foundation, a Kachin-based NGO, offers a critical examination of how the KIO/A governs rare earth mining in Myanmar’s northern borderlands. Based on qualitative interviews conducted between November 2024 and January 2025, the study explores how extractive governance is embedded within the KIO/A’s broader nation-building project, as well as the evolving political economy of conflict in post-coup Myanmar.

Situated within the emerging literature on rebel governance, the report traces the trajectory of the KIO/A’s resource governance since its formation in 1961, illustrating how rare earth extraction has become both a strategic source of revenue and a site of contestation.

The report highlights the complex interplay between the KIO/A, Chinese investors, and local communities. While some residents have benefited economically from land rentals and wage labor, others have mobilized in protest against the environmental degradation, social disruption, and lack of transparency surrounding mining operations. These tensions reveal critical contradictions in the KIO/A’s governance model –particularly the concentration of decision-making power, the prevalence of patron-client relations, and the marginalization of community voices.

By looking at these dynamics, the study contributes to both the empirical understanding of rare earth extraction in Myanmar and the theoretical debates on non-state governance in conflict-affected settings. It also raises important policy questions for international organizations and accountability mechanisms such as the Extractive Industries Transparency Initiative (EITI), especially in contexts where formal state institution has no more authority. 

Read the full study in the appendix for a better understanding of the politics of resource extraction under de facto authorities – and for a detailed analysis of the implications for environmental justice, local governance and the future of federalism in Myanmar.