Vietnam is poised to become a major competitor to China in the critical metals supply chain and could potentially threaten China’s stranglehold on the global rare earth industry. Vietnamese leaders are planning to restart the Đông Pao mine, a massive rare earth mine in Northern Vietnam.
Đông Pao is among the largest rare earth mines in the country, and it has attracted significant interest from Western backers looking for alternative rare earth metal suppliers. With financial backing from Western investors, Vietnam is looking to relaunch the mine in a project with the potential to threaten China’s overwhelming dominance in the sector.
Rare earth elements play a vital role in the global economy and are used as components in electronic devices such as flat-screen televisions, computer hard disks, smartphones and electronic displays as well as defense and clean-energy technologies. However, they are incredibly hard to mine because they usually occur in very small deposits and tend to bind with other minerals.
China carved out its monopoly largely through decades of dedicated strategy, immense government investment and turning a blind eye to the resultant environmental effects of rare earth mineral production. With the world transitioning to an era characterized by electric vehicles and renewable energy, Western nations such as the United States are looking to fortify their supply chains by limiting their reliance on China in favor of building up local production and partnering with friendly nations.
Tessa Kutscher, an executive at Australian miner Blackstone Minerals, says the Vietnam government will launch tenders for blocks of the Đông Pao mine before the year ends. Blackstone Minerals plans on applying for a tender and could invest up to $100 million in the project if it secures a tender.
Although the timing of the tender auctions could change, Vietnam Rare Earth JSC (VTRE) chairman Luu Anh Tuan says the government still plans on relaunching the mine in 2024. Vietnam Rare Earth is the main refiner in Vietnam and has partnered with Blackstone in its rare earth mining project.
A U.S. Geological Survey found that Vietnam has the second largest deposits of rare earths on the globe, but the country’s reserves have remained mostly unexploited as low-cost supplies from China limited investor interest in Vietnam’s rare-earth reserves. However, with many Western nations actively looking to reduce their reliance on China, interest in alternative rare earth sources such as Vietnam has exploded.
During a recent visit to Hanoi, Vietnam, U.S. President Joe Biden signed an agreement to attract even more investors to Vietnam’s fledgling rare earth segment.
Back on U.S. soil, enterprises such as Ucore Rare Metals Inc. (TSX.V: UCU) (OTCQX: UURAF) are setting up facilities to separate and then purify rare earths so that the local supply can be boosted. This will take the region a step closer to weaning itself off of overdependence on China for these vital metals.
NOTE TO INVESTORS: The latest news and updates relating to Ucore Rare Metals Inc. (TSX.V: UCU) (OTCQX: UURAF) are available in the company’s newsroom at http://ibn.fm/UURAF
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