An exploration site for rare earth in the northern province of Lao Cai (Photo: VNA)According to Asia Briefing, a consultant service for investors in Asia, rareearths are essential elements for the production of various products, includingcancer drugs, smartphones, and renewable energy technologies, most notably EVbatteries.
As the global economy makes a shift to greener and more environmentallyfriendly energy, rare earth has become a much sought-after commodity on theinternational market.
According to several studies, China could possess up to 90% of the entireworld's reserve of rare earth. As trade tension has been on the rise betweenChina and the US, more companies have been looking for an alternative forChinese rare earth in a hedging attempt.
According to Reuters, magnet firms from the Republic of Korea(RoK) and China, including an Apple supplier, are set to open factories in theSoutheast Asian country.
"The RoK’s Star Group Industrial (SGI) and China's Baotou INST Magneticwould join companies in sectors as varied as electronics and automobiles inshifting assembly lines against a backdrop of increasing trade restrictions,with clients even requesting the move," the newswire service reported.
Vietnam’s rare earth reserves, which are second only to that ofChina and estimated at 20 million tonnes, remained largely untapped. Thecountry's reserves are mainly distributed in the Northwest region of thecountry while rare earth mining is mainly concentrated in the Northwest andCentral Highlands.
According to Asia Briefing, Vietnam and Japan have forged a close collaborativelink in discovering and extracting rare earth. The rare commodity wasreportedly found in a number of provinces across the country including Lao Cai,Yen Bai, Ha Giang, Cao Bang, Lang Son, Nghe An, Kon Tum and Lam Dong with thehighest known volume in northern Lai Chau province.
In December 2014, a licence was granted to the Lai Chau Rare Earth Joint StockCompany and their Japanese partner to start the extraction of rare earth oresfrom a site in the province, which was said to be capable of large-scaleindustrial operation.
Last September, the province hosted a delegation of RoK experts on rare earthmining to discuss the potential of investment.
The Southeast Asian country has still a long way to catch up with its northernneighbour, said industry experts.
According to Reuters, SGI's Vietnam project, for instance, targets2025 output of 5,000 tonnes of high-end neodymium (NdFeB) magnets per year,enough for 2 million electric vehicles (EVs). However, the country producesjust 1% of the world's magnets, showed Adamas Intelligence data cited in a USDepartment of Energy report, compared with China's 92%.
The country also faces daunting challenges in accessing advanced processingtechnologies and investment capital.
Interest, however, has been growing as countries scramble to secure supply ofthe critical minerals. Vietnam also enjoyed other advantages such as low labourcosts and market access afforded by multiple major trade deals including theComprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),the EU-Vietnam Free Trade Agreement (EVFTA) and the Regional ComprehensiveEconomic Partnership (RCEP)./.
VNA
