After achieving US$616 billion in the first 10 month of the year 2022, Vietnam is on track to reach a trade value of US$700billion this year.
Vietnam is an emerging economic power in Southeast Asia.
Vietnam boasts a young population of more that 98 million and a growing rate of urbanization. Vietnam has the potential and ambition to join the G-20 by 2050. It is the world’s fifteenth-most populous nation and has growth rates on track to reach 7.8 per cent in 2022. Vietnam has one of the best growth prospects in the next century and is quickly attracting international investors’ attention.
The China Plus-One strategy has attracted a lot of media attention in Vietnam.
This strategy has seen companies shift manufacturing hubs to China to diversify risk, increase supply chain resilience, and manage labor issues. Due to increasing tensions between the U.S. and China, as well as rising labor costs in China due to an increase in standard of living, the strategy’s adoption has been increased. This shift has been the primary beneficiary for Vietnam.
Vietnam is not only known for its low-cost manufacturing.
Vietnam also has the second largest reserves of rare earth elements . Although resources are not yet fully developed, Vietnam could help to end China’s REE monopoly. China’s REE production was 60% in 2021. Vietnam’s rare earth mineral reserves make it an ideal location for a downstream processing industry.
It is not a new idea to use Vietnamese REE reserves as a counterweight to Chinese dominance. China placed trade sanctions on Japan in 2010 after a dispute between Japanese and Chinese ships near the Senkaku/Diaoyu Islands. China cut off the supply of REE oxygen to Japan, which caused prices to rise. Japan’s dependence upon China was highlighted by the incident. In response, the Japanese formed a partnership to develop Vietnam’s REE industry. The Chinese sanctions being lifted soon led to trade returning and the Vietnamese industry’s development stalled. Vietnam currently produces very little REEs. In 2021 , production was barely 400 metric tonnes.
Australia can offer the necessary technical expertise, capital, and products to help speed up the development of Vietnam’s REE industry. Despite the fact that there are no Australian REE miners operating in Vietnam at the moment, Blackstone Minerals, an Australian miner, is leading the charge in Vietnam in terms of maximizing the mining opportunities available to it with its Ta Khoa nickel/copper project located in the northern province Son La.
Blackstone Minerals claims the project will prove that it’s feasible for Vietnam’s mining operations to meet the highest standards of environmental, social and corporate governance (ESG). Australian REE Miners need to recognize this opportunity and reposition themselves in order to take advantage of high-profit-yielding opportunities before internationals.
A partnership between Australia and Vietnam could open up a “powerhouse” opportunity for REE production. This partnership could also open up opportunities for downstream partners. Uneconomic deposits, regulatory issues and uneconomical small deposits are all limiting the Vietnamese rare earth industry. source Diplomat
Many of these problems could be solved by a strategic partnership between Australia and Vietnam. Australia is equipped with the technical and product expertise needed to increase the sustainability and efficiency of Vietnam’s resource sector. There are many untapped opportunities for Australian companies in the Mining Equipment, Technology, and Services sector of Vietnam’s resources sector. Australian technology can be used to mine Vietnamese REE reserves sustainably and at a fair cost. Further research into Vietnam’s REE industry and investment will lead to the discovery of viable deposits. This will also open up opportunities to apply Australian technology to solve operational bottlenecks.
Australia can provide technical assistance to Vietnam for its mining operations. It also has the ability to improve the industry’s regulatory framework. Australia is a leader in regulation and has provided a favorable environment for foreign investment while upholding ESG standards. To support sustainable development in the sector, Australia could theoretically “export” its regulations to Vietnam, including its royalty policies and ESG policies.
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