Scenarios

Most likely: Myanmar strikes narrow rare earth deals 

Short-term deals for rare earth exploitation are likely to be made, albeit without addressing longer-term concerns related to the country’s overall prosperity and security. Individual groups like the KIO may renegotiate existing export agreements with Chinese actors, as they have in recent years, using both heightened international scrutiny of rare earth supply chains and favorable shifts in prices or demand to strengthen their bargaining position. 

Myanmar’s other immediate neighbors, including India, could also feature in more limited future dealmaking given their geographic proximity. This remains uncertain, however, as earlier speculation has been dismissed and persistent logistical constraints continue to complicate such prospects. 

Deals brokered between the junta and major external powers such as the U.S. would likely be difficult to sustain. Multiple obstacles persist, including the absence of secure land or sea routes amid an ongoing civil war, the challenges of operating in remote and contested terrain, and the lack of infrastructure needed to transport and process rare earths. Such arrangements would also complicate the KIO’s ties with neighboring China, which carries far greater geographic and economic weight than the more distant U.S. 

Still, such scenarios cannot be entirely ruled out. The actors involved may perceive transactional advantages, while Myanmar retains strategic appeal as a potential link in alternative mineral supply chains seeking to reduce dependence on China and to connect production across the Indo-Pacific region. 

Less likely: Recalibration of Myanmar’s rare earth sector 

The underlying dynamics of the rare earth sector could shift to allow Myanmar to derive more sustainable and broadly distributed benefits from its resources, rather than the current situation in which gains in northern Myanmar accrue mainly to certain local groups and Chinese firms. 

One potential pathway for this – easier to envision under a civilian and representative government than the current military junta – would involve uniting the government, armed groups and other stakeholders to place the country’s rare earth ambitions within a broader discussion of Myanmar’s political and economic future. For instance, some former diplomats familiar with the country’s political and economic landscape have suggested that steps could include negotiating a regulatory constitutional fiscal planning framework for mining as a core part of a broader dialogue on federalism.  

At a minimum, this could involve working out arrangements to manage long-contested issues like decentralization or natural resource-sharing, which would be critical to any eventual outcome. A more ambitious version of this scenario would extend the dialogue to issues such as local community engagement and protections for indigenous peoples’ rights. This could help ensure that concerns around inclusivity and sustainability are addressed. It might also facilitate a move toward what one industry insider described to the author as an “enabling ecosystem” that provides greater clarity for governments and businesses on how the sector will be governed and how major risks will be managed. 

Absent such efforts, rare earths risk becoming a conflict mineral within Myanmar’s security landscape and yet another manifestation of the so-called resource curse, in which an abundance of natural resources undermines broader prosperity.  

Least likely: Rollback of Myanmar rebel groups’ rare earth plans 

This scenario seems unlikely for now, given the government’s limited control over the country and the strategic importance of rare earths to non-state actors in the current geopolitical and geoeconomic environment. 

Furthermore, the Myanmar military has a decades-old history of negotiating ceasefire arrangements with ethnic armies, enabling these groups to pursue their own economic activities while the military remains in power. But a reversal cannot be ruled out entirely.  

The most likely way this could occur is if the government in power or non-state actors like the KIO encounter significant backlash that impinges on their interests. Domestically, reports have shed light on the damage done to the country’s environment and its people, including deforestation, water contamination, soil erosion, biodiversity loss and adverse effects on public health. The impact of unregulated mining practices has already spilled beyond the country’s borders. Water pollution linked to mining activities in Shan State has drawn criticism from neighboring Thailand, whose government has positioned itself as a leading regional player in managing the challenges posed by Myanmar. 

With the junta in power, a dire economic situation and limited diplomatic relationships, Myanmar’s outlook remains precarious. While rare earth deals may generate headlines and short-term leverage, significant obstacles still stand in the way of translating the country’s rare earth ambitions into reality.