25-9-2023 (HANOI) Vietnam is set to revive its largest rare-earths mine next year with a project backed by Western companies, aiming to rival the world’s largest mines and challenge China’s dominance in the sector. The move is part of Vietnam’s broader strategy to establish a rare-earths supply chain and develop its capacity to refine ores into metals used in advanced technologies like electric vehicles, smartphones, and wind turbines.
According to Tessa Kutscher, an executive at Australia’s Blackstone Minerals Ltd, Vietnam’s government plans to launch tenders for multiple blocks of the Dong Pao mine before the end of this year. Blackstone Minerals intends to bid for at least one concession. The exact timeline for the auction may change, but the government aims to restart the mine in 2024, as stated by Luu Anh Tuan, chairman of Vietnam Rare Earth JSC (VTRE), the country’s main refiner and Blackstone’s partner in the project.
China’s dominance in rare-earths production and its disputes with the US and its allies have raised concerns about supply disruptions. This has prompted many nations to seek ways to reduce their reliance on China. Vietnam possesses the second-largest rare-earth deposits globally, but they have remained largely untapped due to low prices controlled by China’s monopoly in the market. During his recent visit to Hanoi, US President Joe Biden signed an agreement to enhance Vietnam’s ability to attract investors for its rare-earth reserves.
Industry executives, investors, analysts, and foreign officials have revealed plans for Vietnam, indicating a shift towards action in reducing reliance on China. However, it remains uncertain whether clients would be willing to pay a premium for rare earths from Vietnam. Developing a rare-earths hub in Vietnam is challenging, but it could position the country as a viable player in the sector while addressing strategic concerns.
Blackstone Minerals’ investment in the Dong Pao project is estimated at around $100 million if it secures the concession. The company is in talks with potential clients, including VinFast and Rivian, electric vehicle manufacturers, for possible contracts that would provide stable prices and secure supply chains.
The successful exploitation of Dong Pao would place Vietnam among the top rare-earths producers globally. However, refining rare earths is a complex process, with China controlling many processing technologies. Dong Pao’s estimated deposits also require reassessment using modern methods. Despite these challenges, Dong Pao’s rare earths are relatively accessible and mostly concentrated in bastnaesite ores. These ores contain cerium, used in flat screens, and lanthanides like praseodymium and neodymium, which are used in magnets.
VTRE aims to win a concession that would allow extraction of approximately 10,000 metric tons of rare-earth oxide (REO) equivalent annually, about one-third of the mine’s expected output. Production could commence by the end of 2024. This would put Dong Pao’s output slightly below that of California’s Mountain Pass mine, one of the world’s largest.
Vietnam plans to develop additional mines and aims to produce up to 60,000 tons of REO equivalent annually by 2030. This would account for 5% to 15% of China’s projected output by the end of the decade, according to David Merriman, a research analyst at consultancy Project Blue.
During Biden’s visit, the US agreed to assist Vietnam in mapping its rare-earth resources and attracting quality investment, potentially encouraging US investors to bid for Vietnam’s new concessions. However, previous attempts by the US to enter the Vietnamese rare-earths industry were unsuccessful. Vietnam still faces challenges in establishing itself as a major rare-earths producer, including improving environmental practices. Nevertheless, experts believe that Vietnam has the resources and expertise to provide alternatives to China in the rare-earths sector.
