Myanmar’s Rare Earths and Borderlands: China’s Grip, India’s Opportunity

Summary

Myanmar has quietly emerged as a crucial node in the global high-tech supply chain due to its vast reserves of heavy rare earth elements (HREEs) like dysprosium and terbium. Beijing has externalised the severe environmental and socio-political costs of critical mineral extraction by outsourcing HREE mining to northern Myanmar, establishing a de facto monopoly. However, the fluid governance dynamics of the Indo-Myanmar and Sino Myanmar borderlands, driven by Ethnic Armed Organisations and political instability in Myanmar since the coup of 2021, have disrupted Beijing’s stranglehold. This commentary analyses how India, leveraging its strategic positioning across the shared borderlands, can utilise this geopolitical inflection point to bolster its critical mineral security and advance its Act East ambitions.

The Borderland Geopolitics of Critical Minerals

1. Myanmar’s HREE and China’s Outsourcing Strategy

While the global rare earth minerals refining is dominated by China, its domestic supply of heavy rare earth elements– essential for permanent magnets, electric vehicles (EVs), wind turbines and precision military technology is minimal. To preserve its domestic ecology and enforce stricter environmental regulations at home, Beijing outsourced HREE extraction to northern Myanmar’ Kachin State. Through partnership with junta-aligned border guard forces and local militias, Chinese state linked firms established thousands of unregulated in-situ acid-leaching pools in Chipwi and Pangwa. It is noteworthy that, by the year 2023, Myanmar supplied over half of China’s HREE imports, granting Beijing a near-monopoly over the downstream processing of critical green technologies. Myanmar became an indispensable resource partner for China’s green energy hegemony.

2. Vulnerabilities in Beijing’s Hinterland Monopoly

The stability of this extraction model relies heavily on governing the borderlands. Following the coup of 2021 and subsequent offensives by resistance forces– most notably the Kachin Independence Army (KIA) has control over the major mining hubs shifted away from junta-backed militias. The KIA’s periodic suspensions of mining operations and illicit exports to China disrupted Beijing’s processing pipelines, leading to a sharp drop in rare earth mineral imports from Myanmar. This supply shock revealed two major strategic vulnerabilities:

Firstly, over reliance on non-state actors can be considered one such strategic vulnerability wherein, Beijing’s dependence on unstable borderland warlords and fluid EAO alliances creates inherent supply vulnerabilities. Secondly, Ethnic resistance groups increasingly view critical mineral deposits as key leverage in negotiating autonomy, revenue-sharing and political legitimacy. This can be termed as Resource Nationalism.

3. India’s Strategic Calculus: The View from the Northeast Borderlands

For New Delhi, the Indo-Myanmar borderlands present both a security challenge and a strategic opportunity. Historically viewed through the lens of counter-insurgency and cross-border security, India’s border state like Manipur, Mizoram, Nagaland and Arunachal Pradesh– form a natural geographical bridge to Myanmar’s resource rich interior. Under its National Critical Minerals Mission and clean energy transition goals, India urgently needs to secure stable access to HREEs to reduce its import dependency on China. Reports indicate India has already begun engaging with various stakeholders– from official delegations attending the Mandalay Mining Forum to seeking mineral samples via borderland groups like the KIA to test and diversify its supply options.

4. India’s Multi-Pronged Borderland Strategy

India can strategically strengthen its position in the borderlands of Indo-Myanmar by adopting a comprehensive, multi-pronged borderland strategy that integrates infrastructure development, diplomatic engagement, industrial capacity and multilateral cooperation.

Firstly, borderland infrastructure development should be prioritised through the expedited implementation of major connectivity initiatives such as Kaladan Multi Modal Project and India-Myanmar-Thailand-Trilateral Highway. These projects would improve connectivity between India’s Northeast and Myanmar, creating alternative trade corridors that facilitate access to Myanmar’s resource rich mineral resources zones while reducing logistical hassles. Enhanced connectivity would also support India's broader Act East Policy by integrating the Northeast with Southeast Asian markets and strengthening regional economic resilience.

Second, India should pursue pragmatic diplomacy that extends beyond formal state-to-state relations by engaging constructively with local borderland stakeholders, including state governments, tribal communities, business networks, and civil society actors. Such an approach would diversify diplomatic engagement, improve cross-border cooperation and contribute to securing critical supply chains in politically fragile border regions. Given Myanmar’s complex political landscape, flexible diplomatic engagement can help sustain economic and strategic interests even during periods of political instability.

Third, India should invest in establishing midstream mineral processing and refining facilities in the Northeast, particularly in industrial centres such as Assam. Rather than exporting raw mineral ores, developing domestic processing capabilities would enable India to add value within its own territory, generate employment opportunities, strengthen industrial ecosystems, and reduce dependency on foreign processing facilities. This approach aligns closely with the objectives of Government of India’s Make in India initiative by promoting domestic manufacturing and enhancing strategic autonomy in critical mineral supply chains.

Finally, India should deepen its participation in plurilateral governance frameworks by collaborating with initiatives such as the Minerals Security Partnership (MSP) and the Quadrilateral Security Dialogue. Through these partnerships, India can contribute to the development of transparent, environmentally sustainable and socially responsible critical mineral supply that comply with Environmental, Social and Governance (ESG) standards. Such cooperation would not only strengthen regional resource governance but also reduce strategic vulnerabilities associated with concentrated global mineral supply chains which can enhance India’s long term economic and geopolitical security.

Conclusion

The conflict over Myanmar’s rare earth elements highlights a key shift in regional politics; critical minerals and borderland governance are now deeply interconnected. China’s resource exploitation in northern Myanmar has created environmental degradation and geopolitical friction, opening a strategic window for alternative regional leadership.

By shifting its borderland policy from passive containment to active, value driven economic engagement, India can position its Northeast as a key gateway for critical mineral supply chains. Sourcing HREEs through transparent, sustainable partnerships with local borderland communities like the Chins, Konyaks, will not only safeguard India’s high-tech manufacturing and national security interests but also offer Myanmar’s border regions a viable, stable alternative to Chinese dominance.

Disclaimer: Views expressed are of the author(s) and do not necessarily reflect the views of The Statecraft Institute.