Vietnam is home to the world’s following- largest reserves of unusual rocks, according to the US Geological Survey.
Nevertheless, Vietnam is struggling extraordinarily to get them out of the earth and onto global markets while the US and its supporters seek a supply chain wall to China’s supremacy of the essential vitamins.
China has de facto monopoly control over the crucial minerals used in everything from smartphones to electric vehicles to military hardware, according to the International Energy Agency, which accounts for 70 % of global rare earths mined and 90 % of global rare earth processing capacity.
Vietnam’s estimated 22 million tons of rare earths accounts for approximately 19 % of the country’s known deposits and is surpassed only by China’s projected 44 million tons.
But Vietnam is still a minute producer, with only 600 plenty produced in 2023, down some 50 % from 2022 rates. China, by contrast, produced 240, 000 tons last year while also war- broken and very poor Myanmar produced 38, 000 tons.
Vietnam’s programs to intensify rare earth mine were hampered by the arrests of leading market figures on corruption charges in October. The head of Vietnam Rare Earth JSC, an American mine company’s partner, was one of the accused, along with Australian Strategic Materials and Blackstone Minerals.
The arrests stymied government plans to auction additional concessions for rare earth mine, and they cast a shadow over the sector, which has stymied foreign investors.
Vietnam adheres to its unique earth masterplan, which calls for the extraction and processing of 2 million tons annually by 2030, despite the dread.  ,
However, many people are now questioning whether Vietnam’s Communist Party leadership will prioritize its anti-corruption initiative over creating a unique world market that could power a silicon industry and the party’s envisioned knowledge-based economy.  ,  ,
In order to issue China’s current dominance of the business, Ian Lange, an associate professor with the Colorado School of Mines who specializes in asset economics, thinks Vietnam has the “bare need” of rich unique earth reserves.
” Rare earths are n’t necessarily rare – deposits are everywhere…The rare part is the processing and separation technology”, Lange said. Basically, every control and isolation facility is located in China.
About 74 % of US-derived rare earth materials are currently imported from China.
However, as the US enacts numerous sanctions and prohibitions against Chinese technology companies in an effort to thwart their growth, China’s virtual monopoly on rare world refining is becoming more vulnerable.
Prior to now, China had used its dominance of unusual rocks as a punishment. Following a sea debate, China in 2010 imposed a moratorium on rare world exports to Japan.
More recently, China restricted exports of chromium and tungsten, both essential elements of a range of current technology products, which China has a grip on global supplies in August of last year.
Vietnam’s immense quantities of gallium, embedded in its estimated 5.4 billion tons of bauxite ore deposits and with higher concentration levels than China’s reserves, would on the surface appear to have the potential to break Beijing’s hold.
However, Vinacomin, a Vietnamese industrial conglomerate specializing in coal and mineral mining, acknowledged in a Channel News Asia program that the country’s most advanced rare earth facilities lack the technology to extract gallium from bauxite.  ,
Although Vietnam has been conducting rare earth research since the 1970s, the industry and its educational pipelines continue to be primarily focused on theoretical and laboratory research and emphasize practical experience, according to Mining Vietnam, an industry trade fair.
It’s not yet known whether foreign investors can bridge knowledge gaps and end industry bottlenecks. However, it is obvious that the US is at the top of the game to support Vietnam’s development of its rare earth industry as a decoupling hedge from its current overdependence on China.
During President Joe Biden’s trip to Hanoi in 2023, the two sides signed a Memorandum of Understanding , to” strengthen technical cooperation to support Vietnam’s efforts to quantify its REE ( rare earth element ) resources and economic potential” and “attract quality investment for integrated REE sector development”.
However, it’s unclear from the perspective of academic Lange and others whether the US can maintain a competitive edge over China’s economies of scale and has the “quality” rare earth refining capabilities for export to Vietnam.
” We all have the textbook. It’s not as though there is some science that only the Chinese know about. No one in the West has actually been processing rare earths, whereas China has been doing it for a long time, Lange said.  ,
Currently, only eight companies in the US are capable of manufacturing intermediate rare earth products, S&, P Global reported. That comparative lack of capacity– and perhaps know- how – means scaling up Vietnam’s industry with US investment would take a long time.
Before such a partnership can be fully realized, Lange argued, it will require further development of the US’s own pilot separation facilities in order to convert Vietnam into a rare earth depot that is not reliant on China for downstream separation and processing.
There has n’t been any direct investment in the sector from US companies despite the US leading a joint coalition with South Korea on rare earth extractive research in Vietnam.  ,
Regarding the extent of US firms ‘ involvement in the development of Vietnam’s rare earth industry, the trade office at the US embassy in Hanoi did not respond to a request for comment.
The few rare earths refining foreign firms, including from Australia, Japan and South Korea, that have sought to produce in Vietnam, some of which were in talks with global EV makers to secure set- price contracts, abandoned their projects after China ramped up supplies, causing prices to plummet.  ,
Vietnam’s downstream processing capabilities are thus still miniscule.
Vietnam Rare Earth JSC (VTRE), an associate professor of politics and international relations at Simmons College with a focus on Southeast Asian politics and security, is the only domestic processor I know of. ” But, that firm has limited endogenous technology, high costs and is mired in an ongoing corruption scandal” . ,
VTRE can currently only process 5, 000 tonnes of rare earth oxides ( REO ) a year. The company had plans to treble that output, VTRE chairman, Luu Anh Tuan, claimed last year– though those plans are now uncertain amid the corruption allegations.
VTRE also planned to conduct a pilot project to build a metalization factory with South Korean company Setopia, which notably has no prior experience in the sector. This is a subsequent step after raw ore processing.
According to the Ministry of Public Security, Tuan is accused of forging value-added tax receipts when he traded rare earths with Thai Duong Group, which runs a rare earth mine in Yen Bai, in northern China.
VTRE had partnered with Australian mining companies Australian Strategic Materials ( ASM) and Blackstone Minerals LTD to bid on the largest rare earth mine in Lai Chau Province, Vietnam, the month before the charges were leveled. No of the Australian businesses have been linked to the scandal.  ,
Doan Van Huan, Thai Duong Group’s chairman, was also arrested on charges of making US$ 25.80 million from illegal sales of ores extracted from the Yen Bai mine.
The precise causes of the sales ‘ illegal nature were not stated in the official government statement.
However, according to a person with knowledge of the situation who spoke with Reuters, the raw ores were shipped to China because domestic refining costs were deemed unprofitable. The export of raw ores is severely restricted in Vietnam under current laws to promote greater domestic refining.  ,
ASM and Blackstone Minerals did not immediately respond to inquiries from Asia Times about whether Tuan’s arrest had affected their agreements and plans with VTRE. On the current state of its dealings with VTRE, Setopia did not respond to a request for comment.
China Rare Earth Group Co Ltd, a state-owned giant in the production of rare earth, is making its own advances in Vietnam as the Dong Pao mine crackdown progresses.  ,
It would be wise to keep the Chinese at bay if Vietnam wants to attract more foreign investment in both mining and processing, according to Abuza.  ,
If Chinese firms move in on Vietnam’s sector, they will ultimately end up sending everything back to China for processing, he asserted.  ,
” China’s near-monopoly is being broken, so the whole motivation for foreign investment in that sector is.” Vietnam’s advantage in so many ways is selling itself as a supply chain diversification from China, according to Abuza.
Some Chinese experts have acknowledged the use of the Kunming-Haiphong railway project as a rare earth extraction strategy without the transfer of technology. The railway, which passes through Vietnam’s rare earths heartland, could be used for convenient transshipment of raw rare earth ores, they suggest.  ,
Significantly, China imposed an export ban on its rare earth processing technologies earlier this year.  , Lange, for one, has suggested that Vietnam could respond with a “resource nationalism” approach similar to Indonesia, which has banned the export of raw nickel to lure more foreign investment in processing.
However, there are some unknowns about Vietnam’s rare earth industry, which means foreigners will likely continue to watch until the situation is clearer.
One US and several Australian companies have the technology and interest, but many businesses are spooked by Vietnam’s current “wild west” nature, according to Abuza.
” Simply, there is no one to partner with. The two biggest players, VTRE and Thai Duong Group, are both mired in corruption investigations”, the academic said.  ,