Myanmar coup may impact China’s metal and rare earth supply

glencore-peru-copper.jpg

Myanmar’s military coup and declaration of a state of emergency has sparked concern in neighbouring China over metal and mineral supplies amid already high tin, copper and rare earth prices. China, the world’s top metals consumer, imports a lot of metals and minerals from Myanmar. Top of Form

Tin

Myanmar is the world’s third-biggest miner of tin, according to the International Tin Association (ITA), and in 2020 accounted for more than 95% of China’s imports of tin concentrate, used by smelters to make refined tin for circuit-board soldering.

China’s overall import reliance for tin is 30-35%. Since Myanmar’s main tin-mining area is the autonomous ethnic Wa region near China, which acts separately from the central government, it has not been affected by the coup and shipments are still possible, says the ITA, which sees concentrate exports holding steady in February.

Mines in southern Myanmar are likely to reduce production and may eventually have to suspend operations as Chinese mining supplies, which enter at the Ruili border crossing in the north, have been cut off, the ITA says. These mines make up about 20% of output.

Rare earths

China is the world’s dominant producer of rare earths, a group of 17 minerals used in consumer electronics and military equipment. But it relied on Myanmar for about half its heavy rare earth concentrates in 2020. Myanmar is a critical supplier of feedstocks essential to high-strength permanent magnets for electric vehicle traction motors, wind power generators, industrial robots and a wide array of defence-related applications. 

There has been no sign of disruption for now, since Myanmar’s rare earth mines are under the control of autonomous militia groups, but the test will come after the Lunar New Year holiday, which begins at the end of this week.

Copper

Myanmar was the world’s 18th-biggest copper producer in 2019, according to the International Copper Study Group, with all output coming from two projects led by China’s Wanbao Mining, a unit of military supplier Norinco.

Refined copper cathode shipments to China were 108,584 tonnes in 2020, barely making a dent in record imports of 4.5 million tonnes from all countries, meaning any disruption would not be material. About 300 Monywa copper miners stopped work on Feb. 5 to protest against the coup, the Irrawaddy news website reported.

Leave a Reply

Your email address will not be published. Required fields are marked *