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Myanmar Military Coup May Disrupt China’s Rare Earth Strategy

The Myanmar military’s coup may disrupt China’s rare earth strategy because Myanmar is an important source for China’s imports of heavy rare earths. Hong Kong’s Ming Pao reported that the economic cooperation between China and Myanmar involves many elements, including industrial transfer, deep water ports, hydroelectric power plants, oil and gas pipelines, oil and gas exploration and development, minerals, gems, and timber, to name just a few examples.

In terms of minerals, the reserves of heavy rare earths only account for less than one percent of the total rare earth reserves and about 90 percent of the heavy rare earth reserves that are in China. Although heavy rare earths account for a very small proportion of the total rare earth reserves in the world, The world has a high consumption rate and could run out quickly. From 2017 to 2018, China significantly reduced its mining volume of heavy rare earth mines and used Myanmar as an alternate source. Myanmar is not a big rare earth country, but among its total rare earth reserves, the proportion of heavy rare earth reserves is relatively high, making it a major supplier of heavy rare earths.

In 2018, China imported 25,800 tons of heavy rare earth ore from Myanmar, which was equal to China’s annual production. According to data from the U.S. Department of the Interior’s Geological Survey (USGS) and other institutions, in 2019, China’s rare earth mine production accounted for 62.9 percent of the world’s total. The U.S. accounted for 12.4 percent; Australia accounted for 10 percent; and Myanmar accounted for 10.5 percent.

The United Nations will certainly continue to discuss Myanmar issues related to the coup and may even consider imposing economic sanctions. If China were to oppose the U.N.’s decision, it would go against China’s claim that the problem should be resolved within the framework of the United Nations. If the situation calls for sanctions against Myanmar, it will put China in an awkward position considering all the economic ties it has with Myanmar.

Source: Central News China, February 15, 2021