Vietnam's Great Untapped Rare Earth Bounty

(MENAFN- Asia Times) Vietnam is home to the world's second-largest reserves of rare earths, according to the US Geological Survey.

Yet while the US and its allies seek a supply chain hedge to China's domination of the critical minerals, Vietnam is struggling mightily to get them out of the ground and onto global markets.

According to the International energy Agency , China accounts for 70% of global rare earths mined and 90% of global rare earth processing capacity, giving it de facto monopoly control of the critical minerals used in everything from smartphones to electric vehicles to military hardware.

Vietnam's estimated 22 million tons of rare earths account for around 19% of the world's known reserves and is surpassed only by China's estimated 44 million tons.

Yet Vietnam is still a minuscule producer, with just 600 tons produced in 2023, down some 50% from 2022 levels. China, by comparison, produced 240,000 tons last year while even war-torn and highly underdeveloped Myanmar produced 38,000 tons.

Vietnam's plans to accelerate rare earth mining were hobbled last October with the arrests of top industry executives on corruption charges. Among those charged was the chairman of Vietnam Rare Earth JSC, a partner to Australian mining companies Blackstone Minerals and Australian Strategic Materials.

The arrests stalled government plans to auction new rare earth mining concessions and cast a cloud of uncertainty over the industry that has given foreign investors pause.

Despite the trepidation, Vietnam is sticking to its rare earth masterplan which envisions extracting and processing 2 million tons per year by 2030.

But many now wonder whether Vietnam's Communist Party leadership will give priority to its anti-corruption campaign over building a rare earth industry that could fuel a semiconductor industry and the party's envisioned knowledge-based economy.

Ian Lange, an associate professor at the Colorado School of Mines who specializes in resource economics, believes Vietnam has the“bare requirement” of plentiful rare earth reserves to challenge China's current domination of the market.

“Rare earths aren't necessarily rare – deposits are everywhere...The rare part is the processing and separation technology,” Lange said.“Essentially every processing and separation facility is in China.”

The US now sources about 74% of its downstream rare earth products from China.

But China's virtual monopoly on rare earth refining is becoming more sensitive as the US imposes rafts of sanctions and bans on Chinese technology companies aimed at stunting their development and expansion.

China has previously used its control over rare earths to punitive effect. In 2010, China imposed a ban on rare earth exports to Japan following a maritime dispute.

More recently, in August last year, China restricted exports of germanium and gallium , both critical components of various modern technology products and of which China has a stranglehold on global supplies.


A gallium oxide chip wafer. Image: Facebook


Asia Times

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.