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The global economy is facing a growing demand for rare earth elements (REE), which are essential for technologies in electronics, renewable energy, defense, and other advanced sectors. Selected elements are used in a wide range of products – from electric vehicles to smartphones and military equipment. Myanmar, currently China’s main supplier of rare earths, is experiencing difficulties, prompting China to seek new sources. So which companies stand to benefit from this dynamic?
What’s the Situation in Myanmar?
Myanmar has established itself as one of the world’s largest suppliers of rare earth elements. According to data from the U.S. Geological Survey, Myanmar accounted for as much as 57% of China’s rare earth imports in 2024. Myanmar's rare earth resources are critical to global supply chains, particularly for hard-to-obtain heavy rare earths like dysprosium and terbium, which are key to technologies used in defense, aerospace, and renewable energy.
This dominant share in the heavy REE market, especially for China, which processes most of these elements, makes Myanmar an essential link in global supply chains. However, political and economic instability, as well as environmental risks associated with mining, cast worrying shadows and risks over this sector.
China
Although China dominates the global rare earth market, its dependence on Myanmar presents a potential weakness in its supply chain. China is the world’s largest processor of these elements, but its reliance on Myanmar, particularly for heavy REEs, means that any geopolitical or environmental disruptions in the country could have global consequences.
Myanmar is thus a key component of both the Chinese and global supply chains, but its instability may trigger price volatility and supply shortages. China is well aware of the complexity of the situation and is actively investing in alternative projects in Malaysia and Laos to stabilize its supply network.
Malaysia
Malaysia is increasingly positioning itself as an alternative to Myanmar in rare earth mining and processing. Lynas Rare Earths, the largest company in the sector, operates a processing facility in Gebeng near Kuantan and has become a key player in this space. The company processes concentrate from its mine in Western Australia and produces rare earth oxides such as neodymium and praseodymium, which are essential for manufacturing permanent magnets used in electric vehicles and other high-tech applications. Another company is Southern Alliance Mining, which earlier this year announced its entry into the rare earth segment, becoming the first publicly listed company on the Singapore Exchange engaged in this type of mining.
Laos
Laos is also emerging as a country with growing potential in the rare earth sector. Canada Rare Earth, a Canadian company, has acquired a 70% stake in a rare earth refinery in Laos, which has the potential to produce up to 3,000 tons of rare earth oxides annually. This project, scheduled to launch in the fourth quarter of 2025, opens new opportunities for rare earth processing in the region.
Conclusion
With the rising demand for rare earths and their critical importance to modern technologies, including electric vehicles, solar panels, and advanced defense systems, countries like Myanmar, Malaysia, and Laos are becoming essential pillars of the global market. However, each of these countries carries its own unique risks that investors should carefully consider. Political instability in Myanmar, environmental challenges, and the geographic dispersion of mining sites suggest that despite growing demand, rare earth prices and supply may remain vulnerable to disruptions. Nevertheless, these markets still present attractive opportunities for investors who are prepared to face the potential risks inherent in this like any other sector.
Sources:
https://www.cnbc.com/2025/06/24/chinas-rare-earth-dominance-myanmar-plays-a-critical-role-.html
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