Two occurrences, the first in which China stopped mining for rare earth elements in Kachin and the second in which the United Wa State Army (UWSA) banned tin mining, confused not only the world community but also think tanks in Myanmar.
It is difficult to understand the timing and justifications given for suspending or outlawing mining in two states in northern Myanmar. One must reflect on their true motivations because it is impossible to forget who the main beneficiaries of both metals are. UWSA and KIA/KIO have been splitting the profits from illegal Chinese mining for rare earth and tin, so a unilateral ban or stop would not be well received. According to reports in the local media, Chinese businesses ceased mining in Kachin in March as a result of local demonstrations.
On April 15th, UWSA declared its region off limits to tin mining, with effect as of August 1st,2023. The sponsored media has made an effort to portray China’s sympathetic and sensitive approach to the Kachin and Shan people, but the action is more planned. How did China suddenly become so sensitive to the welfare of the Kachins and Shans while they are not sympathetic to the concerns of their own people being subjugated since decades in Tibet or Uyighurs? In Kachin, there have long been demonstrations against the mining of rare earths. Second, UWSA is independent of Myanmar rather than China, and China won’t accept anything that could harm their industry. Therefore, it is agreed upon and the goal in both cases is to control rare earth and tin prices globally. When implemented, there would be a production deficit, which would ultimately raise prices.
However, there are still concerns about how and who will enforce the ban on mining on the ground. Rarely do people have the opportunity to get closer to the rare earth or tin mining sites, which are both inaccessible to the general public.
The mining nexus is extremely complex, and everyone benefits from it. Tatmadaw, EAOs, and China are allies. Only China possesses refining facilities, raw materials for extraction and processing, and secure transit to state-owned enterprises in Yunnan. Myanmar only has reserves, and those are in EAO zones. As the Junta merely issues mining licenses—or, more accurately, sells licenses to whoever offers higher profit margins—it is a passive source of income.
One must comprehend the significance of tin and rare earths in the global economy. Demand for rare earth will rise as the demand for electric vehicles rises as a result of increased pressure to reduce carbon emissions on a worldwide scale. Because rare earth mining has serious negative effects on the environment, China has moved its rare earth mining operations to Kachin because it is more economical and poses no environmental risks. China is the only country that refines rare earths now, giving them the monopoly in this industry. China is continuing its operations in Myanmar by using new tactics in order to preserve its reserves. China is aware that EAOs require funding to carry on their fight against the Junta and to provide for internally displaced people (IDPs).International help is dwindling while the number of IDPs is rising. IDPs are a source of power for EAOs, thus they cannot disregard them.
State dynamics differ in Shan. Wa Self Administrative Division is a Chinese Colony, and only Chinese people can ensure UWSA’s survival. Wa is merely a territory in Myanmar by name because the Yuan and the Chinese telecom network long ago superseded the Myanmar currency and network. There are restricted places of UWSA that not even the Myanmar Army is allowed to approach, and even Junta soldiers must notify UWSA in advance of any activity. Since Myanmar knows that opening this front of consolation would be counterproductive, they have long since come to terms with the arrangement and the passive income it provides.
The UWSA’s restriction on tin mining is meant to prevent other players, such as TNLA and MNDAA, from taking advantage of the tin reserves in Shan state. The strength of TNLA and MNDAA’s ability to survive will be impacted if they lose some of the money made from tin mining. Second, given their lack of strength and area of domination, China is pressuring UWSA to push TNLA and MNDAA to the negotiating table. KIA maintains unofficial ties with the Junta while being denied entry to the peace negotiations. KIA silence regarding the airstrike in October 2022, in which more than 80 casualties were reported, is still a mystery. The Junta and China have understandings with AA as well. This explains why AA has said nothing about Chinese encroachment in Rakhine.
Federalism or ideology are not factors in war; it is only a matter of resources and money. While the top leadership of all EAOs live five-star lifestyles and provide the best education for their children, the poor foot soldiers receive motivational injections about the freedom struggle and their own identities.
Since China is the main consumer and no other country will import raw rare earth or tin from Myanmar, rare earth and tin mining will gain momentum in the coming days. There is no alternative to China’s monopoly. Although there will still be anti-China propaganda from the West, the actual situation is different. Food is what people need, not sanctions, social media campaigns, or pointless UN sessions. Locals will benefit if unlawful mining is prevented.As a result, new plans will be developed to balance supply and demand, and China will keep manipulating the prices of rare earth and tin by predicting a drop in output as a result of a ban that has been enforced in Myanmar. Therefore, China will gain in either scenario.
Deng Xijun, China’s Special Envoy, has been sent to Myanmar not only for political and diplomatic purposes but also to more quickly and effectively advance China’s economic interests, including those of the BRI, CMEC, and Lincang Mekong Cooperation. The fact that Deng Xijun met with EAOs in Shan state and then held a briefing in Kunming in February or March of this year indicates that relations between EAOs and China are becoming more solid. The text of the FPNCC statement that was released describes the aims.