A recent report by Global Witness showed the wide extent of in-situ leaching rare earth mining in Myanmar, following remote sensing imagery commissioned earlier this year.

The rare earth industry is no stranger to illegal mining. By 2010, nearly half of the global supply was estimated to be sourced from illegal operations in China. But over a decade of industry consolidation into four major state-owned enterprises and the suspension of environmentally damaging mining practices have effectively curbed illegal mining in China. The final straw came in 2016 when environmental inspections as part of China’s 13th five-year plan suspended rare earth operations in Southern China, where mining focussed on low-grade ion-adsorption clay deposits, best known for their enrichment in the heavy component of the suite of rare earths.

Heavy rare earths include terbium (Tb) and dysprosium (Dy), two elements used to improve neodymium-iron-boron (NdFeB) magnets for use in high-performance applications, such as electric vehicle (EV) drivetrain motors. Across the border from southern China into Myanmar, the geology provided a simple and quick target for the replacement heavy rare earth supply. Within a year of closing operations in China, Myanmar became a significant source of contained rare earth production outside of China and now accounts for close to 50% of global heavy rare earth element supply.

With technological substitutions away from rare earths coming at the cost of performance, rare earth demand is set to grow rapidly as it is currently helping to enable new-energy technologies in the race to net-zero. However, ESG concerns are high on the consumer menu and supply chains are under increasing pressure to show ethical and sustainable sourcing. Project Blue’s rare earth research emphasises that even with sustained rare earth mining in Myanmar, known for military control and slack environmental regulation, the heavy rare earth supply-demand balance will be strained with growth in EVs.