Vietnamese mineral firm Hung Thinh Titanium JSC will supply 500 tons of rare earth oxides every year from 2025 onwards to South Korean cable firm LS Eco Energy.
Under an offtake agreement signed in Seoul Wednesday, the Vietnamese firm will supply 200 tons this year.
LS Eco Energy will use neodymium and disprocium supplied by the Vietnamese firm for its permanent magnet production.
Rare earth oxide is a crucial material for the manufacturing of magnets, which, in turn, is a key component of electric vehicles, wind turbines and robots. Vietnam has recently emerged as a substitute rare earth supplier to China, according to LS Eco Energy.
The agreement is the South Korean firm’s first large-scale rare earth supply chain deal outside China.
The U.S. Geological Survey estimates rare earth reserves in Vietnam at about 22 million tons, ranking it second in the world behind China. However, despite the great potential, rare earth exploitation in Vietnam has been limited in scope. With its current technology, Vietnam can only export raw rare earth minerals. It cannot separate their elements or process them for refinement, according to the Ministry of Natural Resources and Environment.
In October 2023, South Korea’s Ministry of Foreign Affairs and the U.S. Department of State launched a joint scientific research project in Vietnam for extracting rare earth elements. The program, the first of its kind, is carried out under the bilateral “Embassy Science Fellows (ESF) Program.” It will promote the use of eco-friendly technologies to extract rare earth elements and other critical elements from coal ash.