Concerns have been raised over whether the coup situation in Myanmar has had an impact on the multifaceted cooperation with China. The economic cooperation between China and Myanmar is multifaceted, including industrial transfer, deep-water ports, hydropower plants, oil and gas pipelines, oil and gas exploration and development, minerals, gemstones, timber, and more. In terms of minerals, since 2018, Myanmar has leapt to become a “small powerhouse of rare earths”, on which China is definitely relying.
The situation in Myanmar threatens to disrupt China’s rare earths strategy. According to the Central News Agency today, citing Hong Kong Ming Pao analysis reported that the situation brought about by the coup d’état by the Myanmar military may disrupt China’s rare earth strategy, because Myanmar is an important source of heavy rare earths imported by China.
Ming Pao published an article today pointing out that rare earths is a collective name for 17 special metallic elements, and according to the atomic weight respectively, rare earth elements are divided into two categories: light rare earths (8 elements) and heavy rare earths (9 elements).
According to the proven resources, light rare earths account for most of them, and heavy rare earths reserves only account for less than 1% of the total rare earths reserves; among the heavy rare earths reserves, about 90% of them are concentrated in China. The article points out that although heavy rare earths account for a very small percentage of the total global rare earth reserves, they account for about 1/4 of the consumption structure and are consumed at a rapid rate; the heavy rare earth resources, which are already in short supply, will soon be exhausted if they are not restricted in mining. Therefore, from 2017 to 2018, China has significantly compressed the amount of indigenous heavy rare earths mined, and the alternative source is Myanmar. According to Ming Pao, Myanmar is not considered a major rare earth country, but the proportion of heavy rare earth reserves among its total rare earth reserves is relatively high, making it a major producer of heavy rare earths.
In 2018, China imported 25,800 tons of heavy rare earth ore from Myanmar, which is similar to China’s production, the article said. Arguably, Myanmar provides about half of the world’s heavy rare earth ore production and smelts it in China. According to the U.S. Department of the Interior Geological Survey (USGS) and others, in 2019, China accounted for 62.9% of global rare earth ore production, the U.S. for 12.4%, and Australia for 10%, while Myanmar accounted for 10.5%, which is believed to be a high percentage of its heavy rare earth ore alone.
According to the article, the UN will certainly continue to discuss the issue of Myanmar and even consider imposing economic sanctions on the country, and if China opposes it, it will be against its long-standing advocacy of solving problems within the UN framework. But if China supports the imposition of economic sanctions on the Burmese military government, it is not clear whether China’s import of heavy rare earths from Burma will change. According to an article in Ming Pao, the current situation therefore puts China in an extremely awkward position.
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