The ongoing conflict in Myanmar's Kachin state poses a significant threat to the global supply of heavy rare earths, crucial to producing high-tech devices and green technologies.

Nearly half of these minerals are sourced from the region, which has been embroiled in a civil war since the military coup in 2021, reported Reuters.

The Kachin Independence Army (KIA) has been engaged in a fierce battle with the military junta over the town of Bhamo, located less than 100km from the Chinese border.

This strategic location is key for the extraction of heavy rare earths, which are then exported to China for processing.

China, which dominates the heavy rare earth processing market, had earlier caused alarm across international supply networks by limiting mineral exports as a countermeasure to tariffs imposed by US President Donald Trump.

China is currently leveraging its influential position to support Myanmar's struggling military regime, which it views as a key protector of its economic stakes in the region.

China has issued an ultimatum to the KIA through its officials, threatening to cease purchasing minerals from KIA-controlled mines unless the militia relinquishes its attempts to gain full control of Bhamo.

According to the report, the Chinese foreign ministry stated that it was unaware of the specifics of the discussions with the KIA. However, it emphasised the mutual benefits of a ceasefire and peace talks for China, Myanmar, and their citizens.

A KIA official, who requested anonymity, disclosed that China also proposed increased cross-border trade with KIA territories as an incentive for abandoning the takeover of Bhamo.

Failure to comply could result in a blockade of exports from Kachin, including rare-earth minerals.

Additionally, reports have emerged of a Chinese-backed militia gaining control over new rare earth mines in eastern Myanmar.

With the northern mining belt now under the control of an armed group, Chinese miners are seeking alternative sources in Shan state.