Rare earth reserves rank second in the world. Is Vietnam going to make "big moves" in the rare earth field?

Vietnam is planning to restart its largest rare earth mine next year, according to two companies involved in bidding for related projects. The move would mark a key step towards the Southeast Asian country's goal of establishing a rare earths supply chain. Tessa Kutscher, an executive of Australian Blackstone Mining Company, said that as a first step, the Vietnamese government intends to tender for multiple blocks of its DongPao mine before the end of the year, and Blackstone Mining plans to bid for at least one concession.

The basis for the above arrangements he made came from information that has not yet been released by the Ministry of Natural Resources and Environment of Vietnam.

Luu Anh Tuan, chairman of Vietnam Rare Earth Company (VTRE), pointed out that the timing of the auction may change, but the Vietnamese government plans to restart the mine next year.

VTRE is Vietnam’s main rare earth refiner and Blackstone Mining’s partner on the project.

According to statistics, Vietnam's rare earth reserves are second only to China, with estimated reserves of 20 million tons, accounting for 18% of the world's total rare earth reserves, but most of them have not yet been developed. Vietnam's rare earth reserves are mainly distributed in the northwest region of the country. Up to now, Vietnam's rare earth mining is mainly concentrated in the northwest and central plateau regions of the country.

Kutscher said that if Blackstone Mining successfully wins the bid, its investment in the project will reach approximately US$100 million.

She added that the company was discussing possible fixed-price, long-term contracts with potential customers including electric carmakers VinFast and Rivian. Doing so protects suppliers from price fluctuations and guarantees buyers a secure supply chain.

What are the long-term implications of DongPao mine development?

Data show that the DongPao mine located in Laizhou Province, Vietnam, is the largest rare earth mine in Vietnam. Although the mine obtained a mining license in 2014, it has not yet been mined. In recent years, Japanese investors Toyota Tsusho and Sojitz were hit by falling global rare earth prices and eventually gave up on the DongPao mine project.

According to an official of Vietnam Coal and Mineral Industry Group (Vinacomin), which owns the mining rights of DongPao mine, if DongPao mine can be mined effectively, it will promote Vietnam to become one of the world's top rare earth producers.

Of course, the rare earth refining process is complicated. Blackstone Mining said DongPao's estimated mineral reserves also need to be reassessed using modern methods.

But despite this, according to information from the University of Mining and Geology in Hanoi, Vietnam, the rare earths in the DongPao mine are relatively easy to mine, and they are mainly concentrated in bastnaesite. Bastnasite is a cerium fluorocarbonate mineral that often occurs together with some minerals containing rare earth elements. They are often rich in cerium - used in the production of flat screens, and lanthanide elements such as praseodymium and neodymium - used in magnets.

Tuan said Vietnam Rare Earth hopes to win a concession that would allow it to mine about 10,000 tonnes of rare earth oxides (REO) per year, about one-third of the mine's expected annual production. He said specific production may start around the end of 2024.

This would make the output of the DongPao mine slightly lower than that of the Mountain Pass mine, one of the world's largest rare earth mines, which is located in California, USA and produced 43,000 tons of REO equivalent in 2022.

Is Vietnam going to make "big moves" in the field of rare earths?

Vietnam's rare earth mining industry is likely to experience rapid growth in the near future as demand grows steadily, according to industry experts. As the global economy shifts to greener energy sources, rare earths have become a hot commodity in the international market.

In 2022, Vietnam's rare earth mining volume reached 4,300 tons, a year-on-year increase of 9.8 times, ranking sixth in the world.

Vietnam currently plans to develop more mines. In July this year, the Vietnamese government set a goal of producing up to 60,000 tons of REO equivalent per year by 2030. For comparison, China's total rare earth mine control target for 2022 is 210,000 tons of REO.

David Merriman, a research analyst at consulting firm Project Blue, said the targets would bring Vietnam's output by 2030 to 5% to 15% of China's projected output - and he expects China to continue to increase output during that period. He said Vietnam's goals were "ambitious, but not completely impossible to achieve."

It is worth mentioning that while Vietnam is vigorously developing the rare earth industry, it is obviously not difficult to see the presence of Western countries and companies.

According to a statement from the U.S. White House on September 10, during the U.S. visit to Vietnam this month, the two countries signed an agreement. The United States and Vietnam will strengthen technical cooperation, support Vietnam's efforts to quantify its rare earth element resources and economic potential, and attract high-quality investment to promote the comprehensive development of the country's rare earth element industry.