Coal and Civil War: Resource Exploitation in Northern Shan State
By Thuta Aung
Coal, a controversial resource, has become a catalyst for conflict, environmental degradation, and the tightening grip of civil war in Northern Shan State.
Key Takeaways:
In Northern Shan State, coal is not just an economic resource; it is a strategic asset exploited by the Myanmar military, ethnic militias, and crony companies, reinforcing their territorial and political control.
Coal mining has led to severe environmental degradation, water pollution, forced displacement, and health hazards for local communities, with minimal accountability or compensation.
Instead of driving local development, coal extraction has exacerbated local tensions, entrenched inequality, and contributed to the ongoing civil war dynamics in Northern Shan State.
Tangyan, a town in Northern Shan State, gained strategic importance following Operation 1027, as the State Administration Council (SAC) identified it as one of three key locations for the potential recapture of Lashio. The SAC temporarily established the Northeastern Command there, alongside increasing investments and economic optimism from mainland Burma. Tangyan is also known for hosting several controversial online casinos.
Long before recent developments, Tangyan was a military-dominated town where numerous battalions and tactical commands of the Myanmar military were based, systematically oppressing local residents. This control was not limited to the military alone but also extended to its allies, including the so-called People’s Militia and the Shan State Progress Party/ Shan State Army – SSPP/SSA.
Coal, one of the most critical fuels for industrialization, is especially abundant in this region and has long been controlled by powerful stakeholders. Its production is largely monopolized by the military-owned Myanmar Economic Corporation (MEC) and Ngwe Yi Pale, though smaller companies also operate. During the NLD government era, infrastructure expansion drove a surge in coal demand. However, as most deposits are located in conflict-affected areas, this boom disproportionately benefited armed groups authorized to operate there, while local communities and the environment bore the costs. By 2020, Ngwe Yi Pale and MEC accounted for two-thirds of Northern Shan State’s total coal output. MEC itself does not mine directly but sells permits to smaller operators. Much of the coal is used for cement production, as cement plants can process various coal grades and manage logistics independently. The demand for Northern Shan coal further escalated after the People’s Defence Forces (PDFs) gained control in Sagaing Region and disrupted logistics routes to Mandalay, prompting mainland companies to ramp up extraction in the north.
However, many of the targeted areas are villages or farmland where communities rely solely on agriculture and the cultivation of cash crops. MEC-backed companies, after securing permits from Mining Enterprise (1) through profit-sharing agreements, began exploring new coal deposits in these areas. These companies often align with local militia groups and attempt to reassure residents by promising regional development and economic growth. In reality, however, their operations have had significant negative impacts on both the environment and the livelihoods of local populations.
Previously, coal mining in the region had already caused severe impacts on local residents. In 2020, in Tat Lyet village of the Ner Hok village tract, located about nine miles southwest of Tangyan town, underground mining operations led to ground subsidence, forcing 11 households to relocate. The unidentified mining company responsible compensated affected residents with 10 million kyat, but this was only one of the more visible cases of harm.
In addition, Ngwe Yi Pale conducts surface mining in the Tat Lyet village area of Tangyan, severely damaging local farmland and discharging untreated wastewater into the Pang River, a tributary of the Salween River. Villagers living downstream report that mining waste has turned the river “black.” Although the region produces large volumes of coal, no official estimates of the deposits have been made public, and the company has failed to fulfill its corporate social responsibility (CSR) commitments. Compensation for displaced residents has been minimal and often forced.
As a result, there was strong opposition from local residents when Ngwe Yi Pale proposed a new 850-acre coal mining project near Wang Kyaung and Wan Han villages, located across the Pang River. Faced with forced relocation, villagers reported the issue to the SSA/SSPP, the SNLD office, and the Mong Ha militia. However, following the 2021 coup, the village tract leader who opposed the mining operation was threatened by the Mong Ha milita.
In neighboring Mong Yai township, which also has an active coal mining site and a sugar factory, Ngwe Ye Pale faced resistance but successfully began operations in 2018. The company continues to produce coal, exporting it to its subsidiary sugar factory and cement plants.
Due to the presence of people's militias, the SSA/SSPP, and the Myanmar Army, resistance to their control in the region was nearly impossible, even during the previous NLD government era. Since the 2021 coup, the situation has worsened. The attractive profits and ease of coal extraction, thanks to shallow deposits, have attracted many investors seeking permits from MEC. Meanwhile, the environment, local health, and livelihoods remain under serious threat.
Coal is Tangyan’s most significant industrial resource, and if managed responsibly, it could somehow drive the region’s development. However, its current exploitation fuels ongoing conflict and leaves the land uninhabitable. With the Myanmar National Democratic Alliance Army (MNDAA) having recently withdrawn from Lashio and no clear intervention in place, the future remains uncertain, but the Myanmar Army and its affiliated militias may strengthen control, allowing coal extraction to continue fueling conflict in Northern Shan State.
Thuta Aung holds a B.Sc. in Geology and is currently pursuing Environmental Science at Chiang Mai University. He has experience working in environmental conservation, focusing on monitoring and mitigating the impacts of mining operations in Myanmar.
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