Environmental Implications of Myanmar’s Rush for Rare Earth Minerals
By Divya Narvekar | 4 September 2025
Summary
The rare earth mining boom in Myanmar is driven by global demand, weak governance, and armed-group financing, with extraction largely unregulated and environmentally destructive.
Significant rare earth extraction is driving severe environmental degradation, including deforestation and biodiversity loss while worsening public health, fueling conflict economies, and creating significant cross-border pollution risks.
Through 2030, Myanmar will likely remain a pivotal critical minerals supplier. Post-2030, gradual supply diversification has a realistic possibility of reducing Myanmar’s market share, as the conflict or sanctions could trigger sudden market shocks.
In recent years, Myanmar, the conflict-torn Southeast Asian nation, has emerged as a leading source of critical minerals, according to the U.S. Geological Survey. With the rise of clean energy technologies, global demand for these minerals has soared, fueling a surge in mining, often in poorly governed regions. Since the 2021 coup, the extraction of heavy rare earth oxides in Kachin and parts of northern Shan State has accelerated dramatically.
Rare earth exports from Myanmar to China have increased since the coup. From their previous high of 19,500 tons of heavy rare earth oxides in 2021, imports reached 41,700 tonnes in 2023. China uses cross-border trade controls, infrastructure projects, and quiet diplomacy with both the junta and ethnic armed groups to ensure a steady supply. Rare earth minerals are critical components in the manufacturing of planes, electric vehicles, wind turbines, smartphones, and even military aircraft. The vast majority of their production is controlled by China, and the world's increasing appetite for rare earths has led to a boom in unregulated mining in neighbouring Myanmar.
Nestled on China’s southwestern flank, Myanmar is fragmented by a civil war that has all but erased labour and environmental regulations. Miners working for Chinese companies have extracted metals worth billions of dollars and shipped them to China. Ethnic armed groups, most prominently the United Wa State Army (UWSA), military actors and private operators, including investors from across the border in China, have opened and expanded mines, often with little regulation or environmental safeguards. Satellite imagery and field reports reveal a rapidly increasing number of pits, leaching ponds, and processing sites carved into hillsides and river valleys.
Implications
Rare earth minerals, despite their value and importance for industries, come at significant environmental and social costs. Global competition for critical minerals has intensified as countries rush to secure their supply chains for the clean energy transition. Arsenic contamination poses a significant danger if the water is consumed untreated and can also harm aquatic life, making fishing and water-based activities unsafe.
China already dominates midstream processing and is a major buyer of Myanmar’s rare earth exports; control over northern mines has become a bargaining chip for local armed groups and a point of leverage for external powers seeking resources or influence. Recent clashes and shifts in control have disrupted shipments and driven up prices, drawing increased outside attention and more actors into the mix.
The scramble for Myanmar’s rare earths is an uncomfortable paradox: materials essential to building a cleaner energy economy are being extracted in ways that damage local environments and livelihoods. The lack of urgent and coordinated action from international and local stakeholders and authorities will likely continue to damage Myanmar’s environment and social situation, despite the potential value the newly established rare-earth industry could provide.
Forecast
Short-term (Now - 3 months)
China is likely to remain the primary buyer; informal trade channels will likely expand to circumvent regulatory pressure. Output is expected to continue rising due to high global demand, despite sporadic clashes.
Medium-term (3-12 months)
Local health crises are highly likely to escalate (chronic illnesses, loss of agricultural productivity, displacement). It is certain that buyers face an overdependence on Myanmar-China supply chains, thereby heightening their geopolitical vulnerability.
Long-term (>1 year)
Mining activities in Myanmar are highly likely to cause irreversible biodiversity loss and significantly disrupt traditional farming and fishing livelihoods. Cross-border contamination could likely lead to disputes with China, Thailand, and downstream Mekong nations.
