Vietnam’s rare earths are attractive to many

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AGI – Vietnam wants to revive its economy by focusing on rare earths. The country with the world’s second-largest reserves, used in devices such as batteries for electric cars and smartphone screens, is further ramping up extraction of critical minerals. However, the industry has high processing costs, a significant impact on the environment and the issue of illegal mining. The country is then being courted by China and the United States, which would like to forge closer trade ties to secure what is seen as the oil of the future.

Vietnam’s rare earth resources are second only to those of China, which has had a monopoly since the 1980s. But as China’s relationship with the West becomes increasingly volatile, many countries are looking to other sources to supply these increasingly important industrial elements. “China produces about 60% of the world’s rare earths, but more than 90% is processedLouis O’Connor, CEO of Irish investment firm Strategic Metals Invest, told Voanews.

“It was not a good idea to allow one country to control the raw materials that are key to the economic prosperity and growing military capability of all nations.

According to O’Connor, China not only owns most of the world’s raw materials, but also dominates the technical know-how and the complex and expensive refining process. China has 39 metallurgical universities and about 200 metallurgists graduate every week in the country.

“Being able to go from potential to final product is the most challenging, complex and expensive part,” O’Connor said. “Vietnam has deposits, but lacks human capital and technical expertise.” It is for this reason that the country is courted by the global giants, China and the United States. Beijing and Hanoi are working to upgrade a rail link to upgrade a line through Vietnam’s rare earth heartland to the country’s main port in the north, diplomatic sources told Reuters. The route connects Kunming, the capital of China’s Yunnan province, with the Vietnamese port of Haiphong on the Gulf of Tonkin and would be part of the Beijing-backed Belt and Road Initiative (BRI).

Growth that appeals to many

According to the US Geological Survey, Vietnam has increased mining of rare earths tenfold, production reached 4,300 tons last year, up from 400 tons in 2021. Vietnam said in July that it plans to process 2 million tons of rare earths by 2030 and produce 60,000 tons of rare earth oxides annually from 2030.

According to Chinese government data, China’s mining quota is set at 240,000 tons this year to meet demand from the electric vehicle industry. The United States and other countries are interested in Vietnam increasing its production. “The US wants Vietnam to become a more important supplier and possibly replace China and reduce risks from Beijing“, Le Hong Hiep, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore, explained to Voanews.

“Not only the United States, but also other partners such as Korea, Japan and Australia are working with Vietnam to develop the rare earth industry,” he said. South Korean President Yoon Suk Yeol signed a memorandum of understanding with Hanoi in June to establish a joint supply chain center for rare earth minerals. “We have reached an agreement on greater joint development of rare earths“Yoon told Vietnamese President Vo Van Thuong on June 23.

The United States also recently signed a memorandum of cooperation in the rare earth sector during President Joe Biden’s visit to Hanoi on September 9. “We certainly want to work together to ensure that Vietnam is able to use its rich resources in a sustainable way,” said Marc Knapper, the US ambassador to Vietnam, during a press conference on September 13.

Impact on the environment

In fact, with rare earths, there is the problem of the environmental impact of high mining costs. In fact, some companies in Vietnam have been involved in various scandals. On October 20, police arrested six people for mining and tax violations. Police arrested Doan Van Huan, chairman of Hanoi-based Thai Duong Group, which operates a mine in Yen Bai province, and its chief accountant, Nguyen Van Chinh, for violating mining, natural resources and accounting regulations. .

The two were accused of making $25.5 million from the illegal sale of rare earths and iron ore. Police raided 21 dig sites and business sites in Yen Bai province and three other locations. According to local newspaper VnExpress, authorities seized approximately 13,700 tons of rare earths and more than 1,400 tons of iron ore.. A source told Reuters that crude ore from the Yen Bai mine was exported to China to avoid high domestic refining costs, which is against Vietnamese rules.

President Luu Anh Tuan and accountant Nguyen Thi Hien of the country’s main rare earth processing company, Vietnam Rare Earth JSC, were also arrested for violating accounting rules in trading rare earths with the Thai Duong Group. Dang Tran Chi, director of Hop Thanh Phat, and his accountant Pham Thi Ha were arrested on the same charge.

Hanoi is committed to developing the rare earth industry, even if economic gains are limited by environmental and production costs, Hiep told VOAnews. “Vietnam is now interested in promoting this sector mainly for its strategic importance” Hiep added. “If we can develop this industry and become a reliable supplier of rare earth products to the United States and its allies, Vietnam’s strategic position will be greatly strengthened.”

Reproduction is expressly reserved © Agi 2023

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