China is facing a growing threat to its dominance over global rare earth supply chains following major territorial gains by the Kachin Independence Army (KIA) in northern Myanmar. These gains have disrupted mining operations that feed nearly half the world's demand for heavy rare earths—critical elements used in electric vehicles, wind turbines, and advanced military technologies.

Since October 2024, the KIA has seized key rare earth mining zones near Bhamo, Kachin State, where environmentally hazardous extraction methods—primarily in-situ leaching—had been conducted with little regulation. As a result of this disruption, Chinese imports of heavy rare earths from Myanmar dropped sharply in early 2025, sparking global concern about supply shortages and price instability.

China, which processes almost 90% of the world’s rare earths, had previously relied on these low-cost and politically unregulated mines across the border to meet surging demand. Now, Beijing is facing a dilemma: continue importing minerals from rebel-held territory and risk legitimizing their control, or cut ties and deepen its own supply insecurity.

In response, China has closed border crossings, blocked trade routes, and increased diplomatic pressure on Myanmar’s rebel factions. However, the KIA has remained defiant, bolstered by newfound leverage over a globally strategic resource. The group is now directly taxing and controlling mining activities, further asserting its economic and political autonomy.

The disruption comes amid a broader crackdown by China on rare earth exports. In April 2025, Beijing imposed tighter controls and export restrictions on key rare earth elements, prompting alarm in the U.S. and Europe. These latest setbacks in Myanmar now threaten to escalate the global scramble for alternative sources of rare earths, as Western countries accelerate efforts to diversify supply chains and invest in domestic mining and recycling.

Industry analysts warn that prolonged instability in Myanmar could trigger sustained price surges and threaten production timelines for electric vehicles, renewable energy technologies, and advanced electronics.

Meanwhile, environmental concerns continue to mount over the unregulated mining that has already devastated parts of Myanmar’s borderlands.

As the conflict deepens, the global tech industry finds itself vulnerable to the frontlines of a remote ethnic insurgency—exposing the geopolitical fragility behind the minerals powering the green and digital revolutions.