Vietnamese firm finds Australian partner to operate rare earth mine

Vietnam Rare Earth JSC (VTRE) plans to partner with with Blackstone Minerals Ltd of Australia to exploit, manage and operate the Dong Pao rare earths mine in the northwestern province of Lai Chau in line with international standards, said its chairman Luu Anh Tuan.

Established in 2007 and headquartered in Lao Cau village, Ha Nam province, VTRE is the only enterprise with a rare earths processing plant in Vietnam. Its main business activities involve manufacturing light and heavy rare earth compounds, rare earth metals, polishing powder, and recycling rare earths from magnets.

The VTRE chairman said that his company will work with Blackstone Minerals Ltd of Australia to organize an auction for the Dong Pao mine, which is scheduled to be exploited 10 years after being licensed.

According to Tuan, preparations for putting a rare earths separating plant into operation in 2024 are underway, including testing rare earth materials on a small-scale production line in 2023; launching a mining plant design process; and training experts in separating ores into rare earth products with purity of 95% or more.

The Dong Pao mine, covering 132 hectares in Ban Hon commune, Tam Duong district, boasts the largest rare earths reserves in the country, with over 11.3 million tons. It 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 was licensed for exploitation by the Ministry of Natural Resources and Environment in 2014. However, it has been unable to start operations due to difficulties in terms of the market, processing technology, and financial arrangements.

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

Lavreco aims to quickly complete its search for partners to start exploiting and processing at the mine and become the leading enterprise in the industry in Vietnam.

Blackstone Minerals has invested in two large nickel projects with a total investment of up to $12 million in Son La province. Nickel is used widely in future technology industries such as electric vehicle battery production.

Data collected by The Investor shows VTRE had total assets of VND255 billion ($10.42 million) and charter capital of VND50 billion ($2.04 million) as of the end of 2022.

Its accumulated loss sharply fell from nearly VND100 billion ($4.08 million) to only VND31.1 billion ($1.27 million) last year due to a big profit in 2021. Its equity turned from negative VND47.9 billion ($1.96 million) in 2020 to positive VND18.7 billion ($764,000) in 2022.

In 2021, VTRE posted revenue of VND203 billion ($8.3 milion), 4.7 times higher than 2020. Its gross profit margin hit 26.7%, a sharp improvement from 16% the previous year, resulting in a net profit of VND52.2 billion ($2.13 million), 20 times higher than the 2020 figure.

The 2022 revenue decreased slightly to VND198 billion ($8.09 million). However, the gross profit margin plunged to 17.8% while other activities suffered losses of VND17.7 billion ($723,186). Therefore, its net profit reached only VND8.6 billion ($351,800), a sharp decline compared to 2021.

According to chairman Tuan, each year the company imports about 1,000 tons of refined rare earths from Australia and Russia to continue extracting elements to serve customers at home and abroad.

Rare earths are minerals consisting of 17 elements with special magnetic and electrochemical properties. Rare earth elements are valuable, strategic minerals that play an important role in fields ranging from electronics, atomic engineering, machine manufacturing, and chemical industry, to metallurgy and even livestock and crop farming.

According to the U.S. Geological Survey, rare earth reserves in Vietnam reach 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.