Vietnam’s Rare Earths Production Declines as China’s Output Increases
The U.S. Geological Survey (USGS) has significantly reduced its estimates for Vietnam's rare earths production, forecasting further decreases despite the country's abundant resources. This revision contrasts with an increase in production by China, the leading global producer. The adjustments in production estimates come after the Vietnamese authorities arrested corporate executives involved with Western companies in developing rare earths mining projects within the country last October, though no direct correlation between these events and the USGS's revisions has been established.
Rare earth elements, crucial for a variety of industries including electric vehicles, renewables, and military applications, are a strategic resource. Vietnam, holding the world's second-largest rare earth deposits estimated at 22 million tons of rare earth oxide (REO) equivalent, saw its output drop from an initially estimated 4,300 tons in 2022 to just 1,200 tons, according to the USGS. The figure further declined to 600 tons in the following year, diverging from Vietnam's ambitious plans to increase annual production to 20,000-60,000 tons by 2030.In contrast, global rare earth mining production expanded to 350,000 tons last year from 300,000 tons in 2022, with China's output rising to 240,000 tons from 210,000 tons as it increased its production quotas. Additionally, Myanmar saw its production triple to 38,000 tons in 2023 from 12,000 tons the previous year.
The decrease in Vietnam's estimated output raises questions about the future of its rare earth mining projects, including potential new tenders for mining concessions at the country's largest, yet mostly untapped, rare earth mine. Both Blackstone Minerals Ltd and Australian Strategic Materials, which had ventures in Vietnam, have not commented on the status of their projects following the arrests.
The US has sought to strengthen cooperation with Vietnam on rare earths, viewing the country's significant untapped resources as a vital alternative to China's dominance in the sector. Meanwhile, the USGS has also adjusted its estimates for the U.S. and Russia's rare earth reserves downwards, reflecting a shifting landscape in the global market for these critical minerals.
