Australia
China
India
Indonesia
Japan
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam
Rare earth has been one of the richest treasures of Vietnam. As per the government, the country plans to raise its rare earth production to 2.02 mn tonnes a year by 2030. The government plan further states that Vietnam would develop three to four new mines after 2030, aiming to boost its output of raw rare earths to 2.11 mn tonnes by 2050.
Vietnam’s rare earth industry at a glance
Vietnam has an estimated 22 mn tonnes of reserves of rare earth, second only to China, according to the United States Geological Survey (USGS). In 2022, its rare earth production jumped to 4,300 tonnes from 400 tonnes in 2021, the USGS said. Primarily, Vietnam’s rare earth mining is concentrated in the Northwest and Central Highlands and includes light rare earth groups of hydrothermal origin. Some of the other earth minerals are also found in North Nam Xe, Nam Nam Xe, Dong Pao (Lai Chau), Muong Hum (Lao Cai), and Yen Phu (Yen Bai), along the coast from Quang Ninh to Vung Tau.
Besides mining, Vietnam also plans to invest in rare earth refining facilities, with a target of producing 20,000-60,000 tonnes of rare-earth oxides annually (REO) by 2030. The plan aims to raise the annual REO output to 40,000-80,000 tonnes by 2050. Apart from mining, the country also plans to invest in rare earth mining facilities, with a target of annually producing 20,000 to 60,000 tonnes of rare-earth oxides (REO) by 2030.
The world wants to embrace a green future, hence alternative sources of rare earth are in demand. With rapid technological advancements, favourable investment climate, Vietnam, the world’s second-largest supply of rare earth, is emerging as an active destination for investors in the sector.
Why Vietnam’s rare earth industry is flourishing?
Rare earths are critical raw materials for clean energy transition used for electric vehicles and wind turbines. It is also used for electronics, food technology, medical applications, and military equipment. More recently, other countries have started turning to Vietnam to secure supplies for investing in development projects.
Recently, rare-earth company CAVICO Vietnam and the Vietnam Institute of Radiation Technology signed an agreement for conducting research and developing a scandium rare earth deep processing plant. Experts believe that this agreement would give an impetus to the rare earth industry within Vietnam.
With access to key importers of rare earth minerals like China, Japan, and South Korea, Vietnam also boasts a favourable geographical location. In 2022, Vietnam Rare Earth JSC (VTRE), a company based in the northern province of Ha Nam, entered into a contract to annually export 1,000-2,000 tons of rare earth worth $50 mn to South Korea.
Some of the other factors that benefit Vietnam are the country’s significant investments in infrastructure and a skilled and low-cost workforce. The Vietnamese government has identified the rare earth minerals sector, as a priority for development and streamlined procedures for obtaining mining licenses, and established pro-mining industrial zones, including tax incentives.
Challenges and opportunities
In terms of challenge, there is a lack of deep processing technology in Vietnamese exploration and processing companies. These companies struggled to access processing technology, making it a major challenge for businesses to penetrate the domestic market and establish exports. In the past, attempts to establish Vietnam’s rare earth industry also failed because of falling prices and regulatory hurdles. However, with the growing sales of electric vehicles (EVs) have boosted interest in the country. Vietnam is fast becoming an increasingly attractive alternative to China which is mired in trade tensions with the US, post-Covid supply chain bottleneck, and rising labour costs.
Vietnam is becoming a substantial production base in southeast Asia for electronic components and devices and is one of the fastest-growing renewable energy markets. Many countries, especially Australia and Canada, are associating with the Vietnamese government and companies to establish an integrated supply chain for rare earths and other critical materials. Blackstone Minerals has signed a memorandum of understanding (MoU) with Vietnam Rare Earths (VTRE) and metals producer Australian Strategic Materials (ASM) to develop an end-to-end integrated rare earth mine-to-metals value chain in Vietnam.
