Rare earth mining expanding in Myanmar army’s Kachin ‘Special Region’

A new report released this week by the UK-based campaign group Global Witness warned about the devastating consequences on the environment and human health of rare earth mining in a remote corner of northeastern Kachin State. The mining operations, located in Pangwa and Chipwe townships, are thought to be some of the largest rare earth mining operations outside of China. The mines are located in one of the most remote and isolated parts of Myanmar, officially known as Kachin State Special Region No. 1. As Global Witness notes in its report, increasing restrictions on rare earth mining in China have led to a huge shift to mining across the border in Myanmar, mostly to an area that has long been the personal fiefdom of Zakhung Ting Ying, an ex-Communist Party of Burma (CPB) commander who formed a pro-army militia, the New Democratic Army—Kachin (NDAK), in the wake of the CPB’s spectacular internal collapse in 1989. Though long dominated by the military and their local militia allies, much of Pangwa and Chipwe townships, including the areas where the mines are located, could be about to change hands following a series of dramatic victories by the Kachin Independence Organisation (KIO), which in recent months has taken over a large swath of Kachin State at the army’s expense and stand poised to seize its last remaining strongholds in Myanmar’s northernmost state. And if this does occur, it will have real consequences for the global economy, as Chinese trade statistics examined by Global Witness show that the import of rare earth oxides from Myanmar to China have more than doubled, from 19,500 tons in 2021 to 41,700 tons in 2023—almost all of it believed to be from sources in Kachin State. Global Witness points out that the official figures for rare earth imports from Myanmar to China in 2023 were more than double what China’s own quota for domestic rare earth mining is presently set at. “Given that limited alternative sources have emerged in the meantime, this further cements Myanmar’s role as the single largest source of vital HREE [heavy rare earth elements],” said Global Witness, which estimates that Myanmar’s rare earth trade was valued at US$1.4 billion in 2023. Satellite images studied by Global Witness also indicate that the number of mining sites in Kachin State Special Region No. 1 grew significantly between 2021 and 2023 to more than 300, an increase of more than 40%. A rare earth extraction site in Kachin State (Global Witness) Much of this mining uses an in-situ leaching process, whereby ammonium sulphate is forced into holes drilled into a hill or mountain in order to obtain the rare earth minerals. A sludge containing the rare earth is then drained into a series of collection pools through pipes. This process, which in recent years has been more heavily regulated in China due to environmental concerns, is commonly used across the border in Kachin State, where no such rules appear to be in effect, according to Global Witnesses’ research. The valuable rare earth is then shipped across the border to China to be processed, while a sludge of toxic waste is left behind at the soon-to-be-abandoned Kachin mine sites, which due to heavy rains frequently overflow into water sources at the upper head waters of Myanmar’s storied Ayeyarwady River. As local environmentalists have observed, the location of the toxic mines has serious consequences not just for people living in the immediate vicinity, but also for communities living far downstream. Chinese trade data obtained by Global Witness also showed a huge increase in the export of chemicals used in the rare earth mining process from China to Myanmar, with 1.5 million tonnes of ammonium sulphate exported in 2023 (an increase from 93 thousand tonnes in 2015) and 174 thousand tonnes of oxalic acid exported in 2023, up from 342 tonnes in 2015. It appears that the bulk of these chemicals end up in Kachin State Special Region No. 1, where the army heavily restricts the flow of rice and other key staples into the area in order to limit resistance activity but apparently has no problem with allowing in an unlimited supply of hazardous chemicals. Villagers and mine workers interviewed by Global Witness spoke about the dire impact on local communities and their livelihoods that the rare earth mines have already had. “You can’t plant anything in the fields anymore. Can’t catch fish in the streams anymore. Many animals have died by drinking that water,” a mine worker employed at a Pangwa mine told Global Witness. The worker has himself been severely exposed to a range of toxic and severely hazardous chemicals, as he only uses a raincoat and gloves as protection when adding acid to the collection ponds. “It feels like you’re eating it when it gets in your mouth,” the worker said. “It tastes like battery acid. Sour and tangy. Even if you wear a mask near it, your throat burns, and you cough a lot.” Use in Western electric vehicles ‘inevitable’ At present two Chinese state-owned firms, China Northern Rare Earths Group and China Rare Earths Group (REGCC), control the Chinese rare earth market and hence the global rare earth trade, as part of a quota system that was recently established by the Chinese government alongside a series of state-ordered mergers and acquisitions in the industry. REGCC was formed in 2022 after the merging of several firms, including one that Global Witness notes in the past openly acknowledged sourcing rare earth minerals from Myanmar. Documents published online by Chinese authorities indicate that facilities to be operated by REGCC subsidiaries in Longling and Jianghua will rely on rare earths imported from Myanmar. As Longling is located in Yunnan Province, which borders Kachin State, it would appear that this is an obvious destination for rare earth material sourced in Myanmar. Reached for comment by Global Witness, REGCC responded that it “attaches great importance to ESG and supply chain management” and “insists on law-based operation and social responsibilities.” (ESG refers to environmental, social, and corporate governance issues considered by investors.) The firm also claimed it was going to form a special team to investigate concerns raised by Global Witnesses. Global Witness’s report also notes that Chinese magnet makers, JL Mag Rare Earth and Yantai Zhenghai Magnetic Material (also known as ZH Mag) have rare earth supply agreements with REGCC. JL Mag is known to be a supplier of magnets to firms like Tesla and Volkswagen for use in their electric cars. When contacted by Global Witness, JL Mag claimed the firm does not use rare earth supplied from Myanmar, “whether directly, through suppliers, or by any other means.” While JL Mag acknowledged obtaining rare earth material from REGCC subsidiary China Southern Rare Earth Group, a company that was named in Global Witness’ 2022 report into rare earth mining in Myanmar, JL Mag requested that the firm “guarantee that 100% of its heavy rare earth materials come from recycling,” and does not include rare earth from Myanmar. Global Witness points out, however, that such “recycled material” often in fact comes from by-products of the original magnet-making process rather than end-of-life products as the use of the term might imply. “Such ‘recycling’ does little to reduce the probability that the rare earths came from Myanmar, or to address the myriad sustainability threats in the supply chain,” the report notes. It also points out that JL Mag has boasted in the past about supplying Siemens Gamesa and Goldwind, manufacturers of windmill turbines. Rare earth mining can leave a trail of environmental devastation (Global Witness) Many others examining supply chain issues in the rare earth industry, including David Merriman of the consultancy Project Blue, also believe that the Myanmar link to batteries used in so-called green technologies is something Western firms must take seriously. According to Merriman, the “the use of heavy rare earths originating from Myanmar in EV motors manufactured by many Western household brands is almost inevitable.” Despite this claim, definitively proving the Myanmar links to Western brands remains a challenge for the industry watchdogs. “Global Witness did not find conclusive evidence that the permanent magnets purchased by these EV and wind turbine firms contain heavy rare earths from Myanmar. Nevertheless, the supply chain relationships that exist suggest that a wide range of well-known companies should be concerned about environmental, social and conflict-financing risks, and undertake appropriate due diligence into their supply chains,” the report concludes. The Tatmadaw’s original Special Kachin Region The isolated corner of Kachin State where the mines are located has been dominated for decades by Zakhung Ting Ying, a veteran of Myanmar’s long conflicts who is now in his 80s. During his lengthy career, he fought both for and against the military. He also has the distinction of being forced to forfeit his seat in parliament following his re-election in 2015 after being reprimanded for having his underlings physically attack political rivals. A bright student in his youth, Zakhung Ting Ying was sent from Kachin State in the late 1950s to study in Yangon, where he came into contact with a group of Kachin nationalists who later went on to form the KIO. He joined the group shortly after its founding and eventually rose to be a successful commander before defecting to the CPB in 1968 alongside 400 troops and Layauk Ze Lum, a fellow KIO officer and trusted ally. The areas Zakhung Ting Ying and his troops had operated in for the KIO were also brought under the CPB’s control and became the group’s “101 War Zone,” which Zakhung Ting Ying headed. This is rougly also the same area that became Kachin State Special Region No. 1 after the CPB’s demise. Unfortunately for the people of Pangwa, Chipwe, Tsawlaw and Injingyang, there was nothing democratic about the manner in which Zakhung Ting Ying and his clique in the NDAK took advantage of the CPB’s collapse in 1989 to exploit the incredible natural wealth of this corner of Kachin State—first by the large-scale cutting of the area’s forests, and later by establishing multiple mining projects for various minerals. Zahkung Ting Ying at an event held in Kachin’s Special Region 1 in 2020 (NDP/Facebook) The area, home to people from the Rawang, Lachik (also known as Lachid or Lashi), Lawngwaw (or Maru), and Lisu communities, is also rich in linguistic and cultural diversity. Zakhung Ting Ying, who is said to speak more than half a dozen languages, hails from the Ngo Chang Hka people, a Lachik-related community whose ancestral homeland, the Ngo Chang Hka valley, has been irreversibly damaged by his various schemes to enrich himself and his partners in Myanmar’s armed forces, or Tatmadaw. During Senate testimony in 1997, Zahkung Ting Ying was described by a US counter-narcotics official as “someone associated with drug trafficking.” The image of the group did not improve much by 2005, when American diplomats described the NDAK as a group that “resembles nothing more than a tightly-controlled business cartel,” in a cable obtained by Wikileaks. “By all accounts, the outfit’s sole political objective now is to maintain sovereignty over the economic concessions it garnered in 1989 in one of the Burmese regime’s first cease-fire arrangements,” the cable continued. Over the years Zahkhung Ting Ying’s power and influence has waned as he suffered a serious of defections from his group amidst sometimes violent internal power struggles and the breakdown of the NDAK original group along ethnic lines. Most notably Zahkhung Ting Ying’s decades-long partnership with Layauk Ze Lum ended in dramatic fashion with the NDAK chief’s former trusted ally fleeing following a failed coup attempt in September 2005. In 2009, the NDAK officially transformed into a Border Guard Force, with the NDAK units being formally incorporated into the army’s command structure, a move that was accompanied by a considerable build up in the army’s presence in the area. Following the move to transform the NDAK into a BGF, Zahkhung Ting Ying did, however, keep some troops directly under his control and was reported to have hired mercenary bodyguards to protect his private interests. His public vow in 2012 that the KIO would soon be crushed has proven to be untrue, with the KIO now poised to possibly capture territory it hasn’t controlled since Zahkhung Ting Ying broke from the group more than half a century ago.

Rare earth mining expanding in Myanmar army’s Kachin ‘Special Region’

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