Vietnam’s great untapped rare earth bounty

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