Vietnam’s mined output of rare earth materials soared tenfold last year, as global firms flocked to the Southeast Asian country to reduce their dependence on Chinese materials.
Vietnam has boosted its mining of rare earth materials as companies around the world look to divest from Chinese materials.
The Southeast Asian country has the world’s second-largest estimated deposits of rare earths, a group of 17 elements that are crucial for making a range of electronic products, from magnets, glass screens and speakers to trains, mobile phones and missile guidance systems.
At the moment, around 98 per cent of the rare earth materials used in the European Union are imported from China. From 2008 to 2018, China exported nearly 408,000 metric tons of rare earths, which amounted to 42.3 per cent of all rare earth exports over that period.
Vietnam’s rare earth mine production jumped to 4,300 tonnes last year from 400 tonnes in 2021, according to the United States Geological Survey (USGS), a government agency.
However, its output is a tiny fraction of the amount top producers mined last year. China, the world’s biggest producer, mined 210,000 tonnes in 2022, the United States 43,000 tonnes and Australia 18,000 tonnes.
Vietnam’s estimated reserves of 22 million tonnes are half of China’s and larger than any other country, according to USGS. Its output growth last year turned it into the world’s sixth-biggest producer – up from 10th in 2021 – and may signal a turning point in the exploitation of its resources.
In the past, attempts to build up Vietnam’s rare earth industry have stuttered due to falling prices and regulatory hurdles, but growing sales of electric vehicles (EVs) and firms’ efforts to diversify their suppliers have revived interest in the country.
One of the companies interested in investing in Vietnamese rare earths is Australian Strategic Materials Ltd (ASM), which recently announced it would buy 100 tonnes of rare earth oxides this year from Vietnam Rare Earth Co.
ASM said a longer-term agreement with the Vietnamese firm, which is ultimately owned by China’s government, would provide it with a multi-source feedstock option and additional supply security for its processing plant in South Korea.
The main beneficiary of the increased production in Vietnam appears to be China, the world’s largest auto and EV market and also a major global manufacturing hub for electronic goods such as smartphones.
China’s customs data show a doubling of imports from Vietnam of rare earth elements (REEs) and other concentrates that usually contain the metals to nearly 12,000 tonnes last year.
In January this year, Swedish government-owned LKAB found a deposit containing over a million tonnes of rare earth oxides in the Arctic region of Sweden, which could prove to be the largest rare earth deposit in Europe.
Last year, researchers from KU Leuven University in Belgium estimated that Europe will require 35 times more lithium and seven to 26 times the amount of rare earth metals compared to its limited use today in order to meet the EU’s ‘Green Deal’ goal of climate neutrality by 2050.
The study also finds that by 2050, 40 to 75 per cent of Europe’s clean energy metal needs could be met through local recycling if Europe invests heavily now and fixes bottlenecks.
The UK government has also previously announced plans to build the second-largest magnet refinery outside of China, as part of a new ‘Critical Minerals Strategy’ which aims to “bolster the resilience of supply chains” and “seize on the economic opportunities of growing industries.”
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