China rare earth ore imports unaffected by Burma crisis

China's imports of rare earth ores are so far unaffected by the political crisis in Myanmar (Burma) as there have been no disruptions to rare earth mining activity and transport services in the country, Chinese market participants said.

Mining firms in Myanmar are operating at regular run rates and Chinese rare earth separation plants are able to secure ore feedstock imports for medium and heavy rare earth production as normal, indicating there is no impact yet from the political crisis, market participants said.

China has been heavily dependent on rare earth ore imports from Myanmar in recent years, which account for more than 60pc of the northeast Asian country's total ion-absorption rare earth consumption.

Chinese imports of rare earth ores from Myanmar have been increasing significantly over the past few years as China has imposed strict measures to crack down on illegal mining activity and trading in the country since 2017. Annual mining quotas for ion-absorption rare earths issued by the Chinese government are also insufficient to meet rising downstream demand from medium and heavy rare earth production, following rapid developments in the magnet manufacturing industry.

Combined imports from Myanmar, including shipments of rare earth oxide (HS code 28469019), carbonate ores (HS code 28469048) and compounds of rare earth metals (HS code 28469099), rose by 23pc from 2019 to 35,539t last year, with rare earth oxide alone making up around 21,519t.

China imported 6,225t of rare earth carbonate ores from Myanmar last year, down by 52pc from 13,079t a year earlier. Imports from Myanmar fell by 92pc on the year to 173t in December.

Chinese imports of rare earth oxide ores from Myanmar rose by 21pc from a year earlier to 17,512t in 2020, supported by a 22pc year-on-year increase in December deliveries to 1,567t.

Imports of compounds of rare earth metals from Myanmar rose by more than eight times from a year earlier to 11,801t in 2020, while December deliveries increased sixfold from 149t a year earlier to 1,110t.

China's annual mining quotas for ion-absorption rare earths have been maintained at 19,150t since 2018, after rising from 17,900t in 2017. Market participants expect limited reserves of ion-absorption ore in China and strict environmental protection measures to keep ion-absorption mining quotas from rising in the next few years, which will prompt more medium and heavy rare earth plants to increase use of imported ore feedstock.