BANGKOK – President Donald Trump is miffed that the US is aced-out by China in processing rare earths that are especially prized for making strategic-use magnets.
Those magnets are critical to creating high-tech weaponry and equipment used by the military and aerospace industries, including for US warplanes needed to check China.
China hopes to strengthen its near-monopoly over the world’s military-grade processed dysprosium, terbium and other rare earth elements by securing rebel-held mines in Southeast Asia’s war-torn Myanmar while boosting support for its coup-installed military dictatorship.
“China intelligently went in and they sort of took a monopoly of the world’s magnets,” Trump told reporters on August 25 while discussing tariffs. “Nobody needed magnets until they convinced everybody 20 years ago, ‘let’s all do magnets.’
“It’ll take us probably a year to have them. We’re heavy into the world of magnets now, only from a national security standpoint.”
The US Embassy in Myanmar’s Chargé d’Affaires Susan Stevenson visited northern Kachin state’s capital Myitkyina between August 11 and 13, but reportedly did not meet the Kachin Independence Army (KIA) insurgents who control the mountainous state’s rare earth mines.
“[Stevenson] did not engage with KIA officials or members of the military regime during her visit,” the embassy’s spokesperson reportedly said.
“The visit was part of [Stevenson’s] ongoing familiarization travel, to better understand local socio-economic conditions throughout the country,” the spokesperson said, according to The Irrawaddy, an independent Myanmar news publication.
The US is locked out of the raw supplies of Myanmar’s mines that China now dominates, processing 90% of the world’s rare earth elements.
“Myanmar is now the single largest source of heavy rare earth elements globally,” said the London-based environmental watchdog Global Witness.
“The US has one operational rare earths mine, but it does not have the capacity to separate heavy rare earths, and has to send its ore to China for processing,” the British Broadcasting Corp (BBC) reported.
“There used to be US companies that manufactured rare earth magnets. Until the 1980s, the US was in fact the largest producer of rare earths. But these companies exited the market as China began to dominate in terms of scale and cost,” the BBC said.
Beijing expects Chinese money, political persuasion and Myanmar’s aerial bombardments in the mountainous north and east will eventually pacify insurgents where rare earth elements are being mined, and further secure their extraction.
During the past several years, alienation between Washington and Naypyidaw, Myanmar’s capital, enabled Beijing and Moscow to increase their support for Myanmar by providing weapons, investments and diplomatic backing in international forums.
Chinese energy firms now supply solar, wind, hydropower and gas to Myanmar to ease its expensive fuel costs.
China was helping to extract most of Myanmar’s rare earths for several years, but Beijing’s grip slipped in 2024 when insurgents seized some of the mines.
“Most of the HREE (heavy rare earth elements) from Myanmar originate from Kachin state, on the border with China,” Global Witness said.
“China, which controls, refines, produces, and stockpiles nearly 90% of the world’s rare earth supply, has long sourced a significant share of its raw materials from Myanmar’s northern border regions,” the Thailand-based Institute for Strategy and Policy, a think tank, said on July 11.
“Satellite imagery shows at least 370 mining sites in Kachin, mainly in Chipwi and Momauk townships. These sites contain nearly 3,000 in situ leaching ponds for mineral extraction,” the institute’s Nan Lwin said in a report titled, “Myanmar’s rare earths: Cries behind critical minerals.”
“According to our data, Myanmar’s rare earth exports to China exceeded US$3.6 billion in the past four years. That’s over five times higher than the same period before the [2021] coup,” Nan Lwin said.
Minority ethnic Kachin Independence Army (KIA) rebels, long engaged in a fight for autonomy from central military rule, gained control over Myanmar’s most valuable rare earth mines in 2024.
Before the insurgents’ victory, Beijing’s government-owned China Rare Earth Group worked with Myanmar’s regime, handling extractions and exports from Kachin state’s mines to China, while providing Chinese experts to oversee technical issues.
Beijing must now deal more directly with the KIA and is expected to funnel billions of dollars into the guerrillas’ coffers, emboldening their fight against the junta which China simultaneously supports.
A future ceasefire, however, could allow a more balanced sharing of China’s payments for the raw rare earths between the Kachin rebels and the Myanmar regime.
If Washington wants access to the rare earth mines, it would also have to deal directly with the KIA and ruling junta. Kachin state forms Myanmar’s northernmost tip and borders China and India. Transport routes out of Kachin state for shipment to the US would be problematic to secure.
Trucks currently drive northeast from Myanmar’s Kachin, Shan and Wa mines to China’s landlocked southern Yunnan province loaded with fresh, unprocessed rare earths, often in exchange for Chinese-made chemicals needed at the mines for extraction.
Those mines inject ammonium nitrate and other toxic chemicals into the sides of mountains and jungle pits, leaching out ores and concentrates while heavily poisoning soil and rivers.
Waste from the mines, including arsenic, has turned the Kok, Mekong and other rivers into toxic sewers near the mines, impacting the health of people in Myanmar and downriver in neighboring Thailand.
Rare earths include 17 chemically similar elements. Most of the elements are abundant on Earth but considered rare because finding them in a pure form is uncommon, and extracting and processing them is extremely difficult and expensive.
Beijing was estimated to possess at least 85% of the world’s dysprosium and terbium after embracing Myanmar’s military regime when it toppled an elected civilian government in a February 2021 coup.
Kachin state is where mostly dysprosium and terbium are being extracted – two of the world’s most expensive heavy rare earths.
Dysprosium is a soft metal prized by the military because it is extremely magnetic, and is also often used in the control rods in nuclear reactors because it absorbs neutrons.
Solid-state lasers, electric vehicles, wind turbines, computer databases and other equipment also benefit from its heat resistance.
Dysprosium’s name comes from “dysprositos,” a Greek word that can be translated as “hard to get.”
Terbium is a rare earth metal which helps illuminate fluorescent lights, LEDs, television screens, X-rays, pulsed lasers and other light-sensitive devices.
Both elements are needed by the US and other countries to create high-tech weapons and equipment for military and aerospace use.
“Critical minerals, including rare earth elements, are essential for national security and economic resilience,” the White House said in April.
“Processed critical minerals and their derivative products are key building blocks of our defense industrial base and integral to applications such as jet engines, missile guidance systems, advanced computing, radar systems, advanced optics and secure communications equipment.
“The United States remains heavily dependent on foreign sources, particularly adversarial nations, for these essential materials, exposing the economy and defense sector to supply chain disruptions and economic coercion,” the White House said.
China’s involvement in Myanmar was openly apparent when various ethnic groups scored major territorial victories in their decades-long quest for autonomy or independence in Shan state, with some gaining control over rich veins of rare earth deposits.
Beijing was able to help push Myanmar National Democratic Alliance Army (MNDAA) guerrillas into retreating from Lashio, a key Shan state city seized by the mostly ethnic Kokang rebel group, and agree to a ceasefire with the regime.
“Now, in the hillsides of Shan state in eastern Myanmar, Chinese miners are opening new deposits for extraction, according to two sources, both of whom work at one of the mines,” Reuters reported in June.
“At least 100 people are working day-to-night shifts excavating hillsides and extracting minerals using chemicals, the sources said.
“Those mines in Shan state are controlled by the powerful UWSA (United Wa State Army) rebels who often honor their commercial deals with China in exchange for weapons and other aid, despite Beijing’s support for the regime in Naypyitaw,” Reuters reported.
The Wa guerrillas in eastern Myanmar also lord over lucrative opium growing zones in mountains on Shan state’s border with China.
After the Kachin insurgents seized certain mines, Beijing predicted rare earths would become scarcer and prices would rise, which apparently became part of the reason China banned exports of processed rare earths to the US in April.
Myanmar’s military is locked in a civil war against the ethnic Kachin, Kokang, Shan, Ta’ang, Karen, Mon, Karenni, Arakan and various other minority ethnic insurgent groups along the country’s borders with Bangladesh, India, China, Laos and Thailand.
China asked Myanmar, also known as Burma, to allow Chinese security forces into the country to protect its rare earth investments. Naypyitaw, where the junta’s generals command the war effort, rejected the proposal.
Relations between Washington and Naypyitaw, meanwhile, are strained over the military’s 2021 coup, which toppled Aung San Suu Kyi’s National League for Democracy-led elected administration.
In June, Trump banned citizens from Myanmar and 11 other countries from entering the US, reputedly to guard against “foreign terrorists” and other problems. “We will not allow people to enter our country who wish to do us harm,” Trump said at the time.
Myanmar’s junta depends on Beijing’s weaponry, cash and diplomatic support, but now appears open to better relations with the US. Improved ties with Trump could enable the impoverished, resource-rich country to attract international investment and offset gains made by ethnic and pro-democracy rebels.
There are signs the US might be softening its tough stance against the Buddhist-majority country. In early July, Trump wrote to Myanmar’s ruling military leader Senior General Min Aung Hlaing, informing him that the US was raising its tax on imports from Myanmar to 40%.
“It’s certainly the first public indication I’ve seen of US acknowledgement of Min Aung Hlaing and the junta,” Richard Horsey of the International Crisis Group reportedly said.
The general responded in a rare letter hailing Trump and requesting normalization of economic relations. In exchange, the coup-maker general said Myanmar would reduce its 88% import tax on US goods to between zero and 7%.
“Reconsider easing and lifting the economic sanctions imposed on Myanmar, as they hinder the shared interests and prosperity of both countries and their peoples,” Min Aung Hlaing said.
The general’s response to Washington was “a formal letter framing Trump’s correspondence as implicit recognition of his illegitimate coup-installed regime
“Within two days, he [Min Aung Hlaing] responded with a formal letter, framing Trump’s correspondence as implicit recognition of his illegitimate coup-installed regime,” said Free Myanmar advocacy group co-founder Than N Oo.
Two weeks later, on July 24, without explanation, the US Treasury’s Office of Foreign Assets Control removed sanctions on some influential pro-regime individuals in Myanmar involved in technology and other businesses.
Myanmar’s “senior general acknowledged the [US] president’s strong leadership in guiding his country towards national prosperity with the spirit of a true patriot,” the country’s government-controlled media responded at the time.
Min Aung Hlaing also expressed gratitude to Trump for cancelling US government-funded Voice of America and Radio Free Asia’s Burmese language broadcasts, which had reported critically on the regime’s abuses and informed the country’s citizens on advances made by separatist rebels and pro-democracy forces.
The US State Department, however, maintained sanctions on Min Aung Hlaing for his brutal rule, which helped spiral Myanmar into broad civil war, encompassing wide swathes of the nation and resulting in thousands dead on both sides.
Richard S Ehrlich is a Bangkok-based American foreign correspondent reporting from Asia since 1978, and winner of Columbia University’s Foreign Correspondents’ Award. Excerpts from his two new nonfiction books, “Rituals. Killers. Wars. & Sex. — Tibet, India, Nepal, Laos, Vietnam, Afghanistan, Sri Lanka & New York” and “Apocalyptic Tribes, Smugglers & Freaks” are available here.
