Photo: Kachin Wave
Mizzima
Following its 2022 report on the unregulated mining of heavy rare earth elements (HREE) in Myanmar, vital ingredients for the magnets used in electric vehicles (EV) and wind turbines worldwide, Global Witness has issued an update.
According to the 2022 report China, which controls nearly 90% of global rare earth processing capacity, had in effect outsourced much of its extraction to Myanmar, at terrible cost to the environment and local communities. Most of the HREE from Myanmar originate from Kachin State, on the border with China.
Two years after its last report, Global Witness has revisited this region’s toxic mining landscape. New trade data, satellite imagery and community testimony reveal that the world’s dependence on a remote corner of Myanmar has only deepened, and so to have the consequences for the people who live there.
Interviews with local mine workers and community members suggest that the impact on workers ’health, on the environment and on local communities continues to be devastating.
Global Witness also found that imports of heavy rare earth oxides from Myanmar to China skyrocketed from their previous highs of 19,500 tons in 2021 to reach 41,700 tonnes in 2023 – more than double China’s own quota for domestic HREE mining. Given that limited alternative sources have emerged in the meantime, this further cements Myanmar’s role as the single largest source of vital HREE.
Updated satellite imagery analysed by Global Witness reveals the destruction this demand is driving on the ground.
In Kachin Special Region 1, controlled by militias aligned with Myanmar’s junta, the number of mining sites has increased by more than 40%, spreading outwards from the border settlement of Pangwa towards Chipwe town.
Global Witness also identified a sharp increase in the number of sites in Momauk township, a region controlled by the Kachin Independence Organisation (KIO), an ethnic resistance organisation with broad popular support in Kachin that has been locked in a political and armed struggle with Myanmar’s military.
The vast majority of the country’s extraction is explicitly illegal – controlled by the junta which, according to Kachin sources, has no regulations on mining standards.
When contacted by Global Witness prior to publication, a KIO spokesperson said that they had placed “strict rules” on rare earth mining companies in order to protect the environment. However, local sources
consulted by Global Witness were not aware of any legal frameworks put in place by the KIO to regulate the industry.
On both sides, this largely unregulated mining is environmentally devastating, and the threat it poses to ecosystems and to human health is becoming ever more urgent.
The costs are felt by workers and the local population. Across the mining region, workers complain of coughing, numbness, skin conditions and kidney issues, all known health risks from the chemical cocktail used in the mines.
The toxic chemicals used in the extraction process, most of which come from China, are percolating into the streams where local people once fished and drew water to drink. Recent water sampling data seen by Global Witness showed that several streams in Kachin Special Region 1 are highly acidic and contain elevated levels of arsenic. The contaminated water is threatening to lay waste to a region known as a global biodiversity hotspot, home to an estimated 1,500 species that exist nowhere else, and the largest remaining tracts of primary forest in mainland Southeast Asia.
Satellite imagery shows that mining sites in Kachin Special Region 1 – an area controlled by junta-aligned militias, have leapt to over 300, an increase of more than 40% between 2021 and 2023, saturating the landscape around the border town of Pangwa. They are now fast encroaching on the town of Chipwe, which residents describe as once surrounded by orchids and wildlife, with small farms growing rice and taro on the banks of Chipwe creek.
This environmental crisis is compounded by escalating social issues. Drug use is rising among local men, as well as violence and petty crime. As prices spiral for basic goods, teenage boys are leaving school to try their luck in the mines, while young women are recruited via ads on social media to provide sexual and domestic services to the Chinese workers who occupy higher-paying roles in the mining operations.
Local people described how the militias use a mix of coercion and payoffs to facilitate land acquisitions for Chinese companies, the only unsold lands in the region are now rocky areas where mining is difficult. Chinese industry analysts such as Huafu Securities, observed in early 2024 that “after years of unregulated mining, the mineral grade [of Myanmar’s rare earth exports] has gradually declined.”
As Pangwa’s rare earth bonanza reaches its limits, new parts of Kachin State are coming under threat.
A hundred miles south, satellite imagery analysed by Global Witness showed that rare earth mines are now rapidly proliferating in Momauk Township, controlled by the Kachin Independence Organisation (KIO). In 2021, the region contained just nine mining sites. By the end of 2023, that number had leapt to more than 40.
Although these operations are still small in number compared to those under the control of junta-aligned militias in Kachin Special Region 1, a local woman stated that the KIO-controlled region has suffered a similar rise in health conditions, as well as drug addiction and sex work linked to the growth of mining.
After the Kachin Independence Organisation (KIO) cancelled a rare earth mining project in Mansi Township following protests by local communities, KIO commander General N’Ban La delivered a speech insisting that the mining revenues had been intended to fund its struggle against the junta.
The region is an active conflict zone, which in early 2024 saw a series of clashes between the KIO’s armed wing, the Kachin Independence Army (KIA), and Myanmar’s military. The KIO also controls territory in other parts of Kachin state, including a small pocket of rare earth mines in Hpare, 15 miles north of Pangwa.
When Global Witness contacted the KIO for comment, a spokesperson said that, in areas they control, rare earth mining started in 2021 and is currently limited to Munghka district [where Momauk township is located]. They said that when negative impacts arise they stop the mining, that mining only proceeds with local people’s consent, and that “in order not to harm the environment, KIO have regulated strict rules on [rare earth] mining companies”.
They added that “income generated from [rare earth] mining is not considered as revenue for the KIO. Usually it is set aside for the regional development fund. This will be spent for education, health and infrastructure development in the region.”
Demand for permanent magnets, mostly used in EVs and wind turbines, is driving the boom in rare earth mining across Kachin state. It appears that Myanmar’s HREE output goes predominantly to rare earth processors in China, then on to magnet manufacturers, before finding its way to EV and wind turbine firms – some of which are household names.
Documents published online by Chinese authorities outline plans for facilities owned by subsidiaries of China Northern Rare Earths Group and China Rare Earths Group (REGCC) in Longling and Jianghua to rely on rare earths imported from Myanmar.
After processing, a significant proportion of HREE is used to make permanent magnets. The vast majority of rare earth magnets – 92% according to one estimate – are produced in China.
The world’s dependence on HREE from Myanmar was laid bare in 2021 and 2022, when concerns about the impact of the coronavirus pandemic and post-coup instability led China to close the Myanmar border. The disruption limited supplies of HREE and caused prices to soar, sending shockwaves through the rare earth industry and sparking international conversations about the security of supply.
These concerns are justified. Myanmar’s rare earth sector is not only environmentally devastating, but also occurring in a context of high political instability. Furthermore, a lack of proper geological mapping in this remote and complex region means that nobody knows how big Myanmar’s reserves are, or how fast they are running out.
Global Witness recommends that companies mining or planning to mine heavy rare earths in Myanmar halt mining operations, in recognition that they are environmentally devastating and violate international norms. All are operating without a clear regulatory framework and most are explicitly illegal. They need to implement a responsible exit, including rehabilitating the environment, compensating affected communities, and returning land to customary landholders and local communities.
Global Witness calls on the KIO local authorities in rare earth mining regions in Myanmar to stop mining activities until safeguards in line with international standards are put in place that protect local communities and the environment from adverse impacts associated with rare earth mining.
They should also work with civil society and local communities to develop regulations for responsible mining that benefits the people and protects the environment.
Global Witness also wants all companies whose supply chains involve heavy rare earths to apply the OECD Guidance five-step framework, outlined below, when sourcing heavy rare earth minerals or products containing heavy rare earth metals:
• Map rare earth supply chains, identify all processors in supply chains and trace minerals back to the mine.
• Identify human rights, conflict finance, environmental and other risks along supply chains.
• Engage with suppliers and other relevant stakeholders on mapping supply chains and risks in the supply chains as well as mitigating them.
• Develop and implement risk management plans.
• Report in detail on supply chain due diligence including supply chain analysis, identified risks as well as measures taken to prevent and mitigate and remediate risks and negative impacts on an at least yearly basis.
Following the OECD Guidance, companies should suspend or discontinue engagement with suppliers if there is a reasonable risk of serious human rights abuse and/or conflict finance.
According to Global Witness analysis responsibly sourcing heavy rare earths from Myanmar is impossible in the current context and companies should therefore disengage responsibly.
It says that given the proportion of heavy rare earths extracted in Myanmar and the nature of the supply chains, companies should assume that heavy rare earth minerals in their supply chains come from Myanmar unless upstream suppliers can clearly demonstrate that it was sourced from elsewhere.
Companies producing magnets should use recycled feedstock and look for other sources of rare earths than from Myanmar that fulfill high environmental, social and governance standards.
Companies that procure magnets should where available use, and otherwise invest in, alternative technologies that substitute heavy rare earths and seek a supply that is free from heavy rare earths produced in Myanmar.
Financiers and investors in companies that mine, process, or source rare earths need to develop an engagement plan to ensure that companies in receipt of investment are not contributing directly or indirectly to harms related to heavy rare earth mining in Myanmar.
They should make public reporting on sourcing a requirement of financial support or investment and use leverage, such as the threat of withdrawing financial support, to dissuade companies from continuing to source, directly or indirectly, heavy rare earths from Myanmar.
Industry bodies need to ensure that members carry out supply chain due diligence aligned with the UN Guiding Principles on Business and Human Rights, the OECD Guidance, the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct and other internationally agreed standards and principles.
Global Witness also has recommendations for ways governments can help. They are as follows:
Enforce due diligence regulations and strengthen them where they are not in line with UN and OECD standards.
Adopt and enforce legislation ensuring effective human rights and environmental due diligence including strict penalties for non-compliance in countries that do not have respective regulations.
Adopt import restrictions for rare earth minerals produced in Myanmar barring them from entry unless the importer can present sufficient evidence that the product has not been linked to human rights abuses, conflict and corruption and the product was produced legally.
Hold mining companies operating overseas accountable to the same environmental social and governance regulations that apply in their own country as well as the highest international standards. These should include:
• The right of Free Prior Informed Consent (FPIC) of Indigenous Peoples as well as other affected communities.
• Environmental standards reducing the negative impact of rare earth extraction to the maximum possible, e.g. by requiring companies to use alternative, less environmentally destructive methods than in-situ leaching.
• Rehabilitation of mining sites and affected landscapes, including proper disposal of chemicals and wastewater and other waste products.
Adopt policies that reduce the use of heavy rare earths in electric vehicles by fostering public transport systems and carpooling, support the reuse and recycling of rare earths and use the potential for remining of rare earths (estimated to amount to 30% of the EU’s annual consumption).
Ensure national financial systems do not facilitate money laundering related to the illicit trade in heavy rare earths.
