A group of armed men claims to have taken control of the rare earth mines in Myanmar

A group of rebels fighting Myanmar's ruling army has claimed control of a mine hub, a major supplier to China of rare earth oxides. This will likely disrupt shipments of materials used in clean technology and other technologies.

In Kachin State, around the towns Panwa & Chipwe and adjacent to Yunnan Province in southwestern China, rare earth mining is concentrated.

Naw Bu, the spokesperson for Colonel Kachin Independence Army, said on Tuesday that Panwa was under control by the Kachin Independence Army on October 19. According to the local Myanmar media, it had captured Chipwe previously. It was unable to independently verify both towns' status.

Naw Bu, KIA's director of communications, said that the KIA's current focus is on Panwa. It has no plans to address rare earths and other economic issues.

When asked if KIA was open to working with China in rare earths, he did not reply.

Prior to this, the rare earth mining area in Kachin State was under the control and payments of the militia group NDA-K. This group is affiliated with Myanmar's government junta, and has welcomed Chinese companies that wanted to set up mines.

According to Ord Minnett, Myanmar was the top exporter of REOs in the world last year. It supplied China with 50,000 metric tonnes of REOs from ion adsorption clays. This exceeded China's IAC mining quota, which is 19,000 tons.

Research firm Adamas Intelligence stated in a Tuesday note that "rebel control of these mine sites could disrupt rare earth concentrat shipments into China which have been declining for four straight months due to the monsoon and other challenges."

China is the largest importer and consumer of rare earth compounds and ores in the world. It uses them to manufacture refined rare earth and magnetic products, industries that it dominates.

Matthew Hope, Ord Minnett analyst, stated that China stopped rare earth imports and exports from Myanmar last month due to conflict.

"I expect KIA to resume its REO business, provided China is willing to accept exports and provide the technicians and ammonium sulphate. Hope added: "I think it'll demand payment before letting companies go."

He said that once the conflict is over, financial deals will likely be renegotiated with Chinese miners, delaying restarts to early 2025. Prices for REOs, which are used in magnets, may also rise due to a tightening supply. (Reporting Shoon Naing, Mai Nguyen and Editing Tony Munroe & Edwina Gibbs).

(source: Reuters)