Future of rare earths production in Myanmar remains a major wildcard
The future of Myanmar’s mine production and concentrate exports to China remains a major wildcard over the forecast period. Since 2015, with the gradual elimination of illegal rare earths production in China, Myanmar has grown to become a critical feedstock supplier to the nation and, consequently, to the world’s magnet supply chains.
Below is an extract from our new Rare Earth Magnet Market Outlook to 2040 report that is especially poignant today in light of the latest escalation in Myanmar, and resultant mine shutdowns and border closures.
Myanmar has become a critical feedstock supplier to China
The future of Myanmar’s mine production and concentrate exports to China remains a major wildcard over the forecast period. Since 2015, with the gradual elimination of illegal rare earths production in China, Myanmar has grown to become a critical feedstock supplier to the nation and, consequently, to the world’s magnet supply chains.
From just 7% of global magnet rare earth oxide mine supply in 2015, Myanmar’s share rose to 14% as of 2020 before falling slightly to 13% in 2021 and sharply down to 7% in 2022 on pandemic- and coup-related border closures with China.
Last year, however, Myanmar’s exports to China more than tripled year-over-year (on a TREO contained basis), making it responsible for nearly 20% of global magnet rare earth oxide mine supply.
In the case of dysprosium and terbium more specifically, however, Myanmar’s share of global mine supply reached a record 57% last year (and averaged 35% over the five years prior), evidencing the systemic supply risk that Myanmar presents to the global magnet supply chain and the end-use markets knowingly or unknowingly reliant on these supplies.
Have we reached peak Myanmar?
After spiking last year, we believe that annual supplies from Myanmar to China are poised to fall by half through the end of this decade then go relatively unchanged through 2040 at a level on par with historical annual production between 2019 and 2021.
At the basis of this outlook is our view that the industry has reached “peak Myanmar” and, following years of unorganized exploitation, environmental destruction and depletion/sterilization of resources, output from Myanmar is poised to decline gradually in the years ahead – a view supported by some market participants and analysts in China.
However, with a coup underway since February 2021 and ongoing, and often escalating, fighting between the military government and rebel armies, the future of supplies from Myanmar remains uncertain on a month-by-month basis, let alone over the medium- to long-term.
Future of supplies from Myanmar remains uncertain on a month-by-month basis, let alone over the medium- to long-term.
– Adamas Intelligence | Rare Earth Magnet Market Outlook to 2040
Imminently irreplaceable supplier into trillion-dollar value chains
China, more than any other, has a major interest in seeing rare earth supplies continue to flow from Myanmar to China’s processors unabated. In a vote of support for the military-run government, China has promised aid for Myanmar to carry out a census followed by an election next year – a move that could steer the country towards a resolution that both China and the junta-led government wish to see.
Whatever the outcome, in just a few years Myanmar has become a critical, imminently irreplaceable supplier into trillion-dollar technology value chains and thereby presents a major systemic risk with potential to derail entire industries and government strategies should production cease or be significantly curtailed.
More information?
Check our latest Rare Earth Magnet Market Outlook to 2040 annual report – the industry’s go-to reference for magnet market intelligence.
