Vietnam has signaled its intentions to play a role in the global rare earths supply chain as a wider supply base worldwide means less dependence on China.
South Korea’s Ministry of Trade, Industry and Energy announced in Seoul on December 5, 2022 that it had signed an agreement with the Vietnamese Ministry of Industry and Trade to expand cooperation in core minerals including rare earth elements.
The signing was part of a meeting between the presidents of South Korea and Vietnam in Seoul, during which the two nations agreed to upgrade their ties to a comprehensive strategic partnership.
The two leaders also agreed to explore and develop core minerals in Vietnam and to promote investment in order to stabilize the global supply chains for rare earths.
Rare earths are important raw materials for chips, smartphones, computers, displays, other electronics, medical and military equipment, electric vehicles, and wind turbines.
According to official data, Vietnam is estimated to have about 22 million tons of rare earth reserves, mostly in the north. The fast-expanding economy has so far been unable to fully tap into its potential despite years of exploration.
However, Vietnam has become a production base for global electronics manufacturers, and is one of the fastest-growing renewable energy markets. The government is seeking to reach its carbon neutral target by 2050.
In mid-December, Vietnam Rare Earth JSC, headquartered in the northern province of Ha Nam, signed a contract to annually export 1,000-2,000 tons of rare earths to South Korea. Under the deal, the Vietnamese firm will supply rare earth oxides worth $50 million over five years from 2023 to Korean Strategic Materials Metals, a subsidiary of Australian Strategic Materials Limited (ASM).
The materials will be used at ASM's Korean Metals plant before its Dubbo mine starts operation. For years, ASM has been mining minerals such as rare earths in Dubbo, New South Wales, Australia, and processing them in South Korea.
Also in December, the Canadian province of Saskatchewan sent a trade mission to Vietnam to sound out opportunities. Saskatchewan's Trade and Export Minister Jeremy Harrison noted green energy, sustainable mining, and rare earths as areas where Saskatchewan and Vietnam can collaborate.
Canada is seeking to intensify its trade ties with Vietnam, and both are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.
Japan, one of the world’s largest markets for rare earth minerals, started to buy Vietnamese rare earths in 2010.
The global rare earths market was valued at more than $9.34 billion in 2021 and is expected to expand at a combined annual growth rate of 3.8% until 2027 to reach $11.69 billion, according to the “Rare Earth Metals Market Insights 2022" compiled by www.360researchreports.com.