Delayed mining project at Vietnam’s largest rare earths deposit sees light at end of tunnel

A project to exploit Vietnam's biggest rare earth mine, known as Dong Pao, is finally beginning to see a light at the end of the tunnel after a 10-year delay, as its owner is seeking partners.

The project is owned by Lai Chau-Vimico Rare Earth JSC (Lavreco), a subsidiary of Vinacomin-Minerals Holding Corporation (Vimico) – a member of state-run mining group Vinacomin. It spans 132 hectares in Ban Hon commune, Tam Duong district, in the northern province of Lai Chau, which borders China. The Dong Pao rare earths mine boasts total reserves of 11.3 million tons.

It was licensed by the provincial government in late 2013, with a total investment of VND765 billion ($30.04 million). In 2014, the project received an exploitation permit from the Ministry of Natural Resources and Environment. It includes two mines with seven ore deposits, with a total reserve of 24.3 million tons, and two mineral processing plants with a combined annual capacity of over one million tons and an output of 75,782 tons.

In 2012, Lavreco and Vinacomin signed a memorandum of understanding with Japan’s Dong Pao Rare Earth Development Company for cooperation in rare earth exploitation and processing. However, the Japanese partner backed out, so the company was unable to obtain investment capital and rare earth processing technology from Japan.

The implementation value of the project hit VND177.3 billion ($6.96 million) as of end-2023, compared to zero VND in 2022.

Despite challenges in technology, market conditions, capital, and other setbacks, Vinacomin announced that it is tailoring the project and seeking partners for its implementation after 10 years of inaction.

Moreover, Vinacomin executives noted that the new progress has been driven by the role and demand for rare earths in the future.

The global geopolitical and economic landscape is expected to change significantly due to recent unpredictable developments, such as the impacts of U.S.-China trade tensions, and unharmonious relations between the U.S. plus the EU and Russia.

Besides, science and technology competition between nations is becoming increasingly fierce. Given the crucial role of rare earths in modern industries, green energy, the defense industry, and especially in the fourth industrial revolution, the battle for rare earth supplies is likely to intensify in the near future, the Vinacomin executives analyzed.

In addition, in 2022 and 2023, a series of guidelines and decisions on rare earth exploitation were enacted, including the Prime Minister's Decision 866/QD-TTg approving a plan for the exploration, exploitation, processing, and use of minerals in 2021-2030, with a vision to 2050.

As per the decision, which took effect on July 18, 2023, Vietnam will exploit about two million tons of rare earths each year. This was the basis for rare earth enterprises to start mining.

In 2023, Lavreco recorded 149 billion ($5.85 million) in revenue and VND134.5 million ($5,640) in net profit, up from VND240 million ($9,800) and zero, respectively, in 2022.

According to the U.S. Geological Survey, rare earth reserves in Vietnam stand at about 22 million tons, ranking second in the world behind China.

Despite its great potential, rare earth exploitation in Vietnam remains very limited. With current technology, Vietnam can only export raw rare earths, and not separate their elements or process them for refinement, according to the Ministry of Natural Resources and Environment.