Highlights
- Vietnam possesses significant rare earth element deposits, with the Dong Pao mine poised to become a major global production site.
- Strategic international partnerships with Australian, American, and South Korean companies are driving Vietnam’s rare earth industry development.
- The country aims to produce 60,000 tons of rare earth oxides annually by 2030, positioning itself as a critical alternative to China’s rare earth monopoly.
Beneath the misty mountains of northern Vietnam and the mineral-rich sands of its central coast lies a largely untapped treasure: some of the world’s most promising rare earth element (REE) deposits. For years, these critical resources—vital for electric vehicles, wind turbines, and national defense—remained idle, Vietnam producing only a fraction of its potential. But that is about to change.
Despite a recent downward revision of its official reserves from 22 million to 3.5 million metric tons, Vietnam still ranks among the top six countries globally for rare earth deposits. And while output has historically been negligible, the tide is turning. At the heart of this shift is the dormant Dong Pao mine in Lai Châu (opens in a new tab) province—once shelved, now slated for a dramatic reboot. The Vietnamese government is actively tendering new mining concessions at Dong Pao, with the aim of beginning production in partnership with international players.
This reawakening isn’t happening in a vacuum. A network of strategic alliances is forming. Australian miner Blackstone Minerals (opens in a new tab), in joint venture with state-backed Vietnam Rare Earth JSC (opens in a new tab) (VTRE), is pursuing production rights. Meanwhile, deals with Australia’s ASM (opens in a new tab) and EV manufacturers like VinFast (opens in a new tab) and Rivian signal (opens in a new tab) growing Western interest in a secure, non-Chinese REE supply. South Korean and even Chinese magnet makers are setting up shop in Vietnam, hedging against Beijing’s tightening grip on magnet exports.
Geopolitically, Vietnam has emerged as the newest front in the U.S.-China rare earth rivalry. Washington is courting Hanoi with elevated diplomatic status and promises of mining support, hoping to position Vietnam as a critical counterweight to China’s dominance. As Rare Earth Exchanges (REEx) just reported the Trump administration announced a “deal” with Vietnam, yet the latter has declared it’s not quite sealed yet. China’s tense about the unfolding situation.
Yes, Vietnam must play it carefully. Again, while the U.S. recently declared a major trade deal “done,” Hanoi quickly clarified that no final agreement had been reached—highlighting its desire to benefit from both sides without becoming a pawn in their conflict.
For investors, Vietnam’s rare earth story is no longer a long-term theory—it’s a rapidly unfolding opportunity. But it’s not without risk. Infrastructure gaps, environmental concerns, and geopolitical uncertainties persist. Still, for those willing to navigate the terrain, Vietnam may soon offer a rare path to early-mover advantage in the global REE supply chain.
Vietnam’s Rare Earth Potential and Reserves
Vietnam has long been viewed as a sleeping giant in rare earth minerals. Geological surveys indicate the country hosts rich REE deposits, particularly in the Northwest Highlands bordering China and in pockets of the Central Highlands, reports (opens in a new tab) Vietnam Briefing. Historic estimates put Vietnam’s rare earth reserves as the world’s second-largest after China, at 22 million tons.
However, Vietnam’s actual proven reserves were recently revised to 3.5 million tons, reflecting more conservative data from company and government surveys. This sizable resource base includes both light rare earth elements (LREEs) like cerium, lanthanum, neodymium, and praseodymium and some heavy REEs (in smaller concentrations) in certain mineral sands and clay deposits along the coast.
Despite this geological potential, Vietnam’s rare earth industry remains relatively nascent today. Annual output is tiny – only about 300 tonnes of rare-earth oxide (REO) in recent years according to a Mining.com entry (opens in a new tab), barely a blip at ~1% of global production. Essentially, Vietnam has the rocks but not yet the results. Officials often tout Vietnam’s rare earth endowment as a strategic asset for high-tech and green industries, but mass production has yet to begin. A mere 4,300 tons of REOs were produced in 2022 (mostly from stockpiles or pilot operations), and plans to ramp this up have repeatedly stalled due to low prices and technical hurdles.
One major reason is that China’s dominance in rare earths kept prices low, dissuading investment in Vietnam for much of the past decade per reports such as in Asia Financial (opens in a new tab). China accounts for approximately 70% of mined rare earths and a significantly higher share of processing. When China flooded the market earlier or imposed export quotas at will, it directly impacted would-be competitors. Japanese firms Sojitz and Toyota Tsusho, for instance, had started developing Vietnam’s REE mines in the 2010s, only to abandon the projects after China’s supply surge caused rare earth prices to plummet. These dynamics left Vietnam’s treasure largely untapped, with dormant mines and struggling local miners.
Dormant Deposits and Reawakening Projects
The centerpiece of Vietnam’s rare earth resurgence is the Dong Pao mine – a large LREE deposit in Lai Châu (NW Vietnam). Dong Pao is the country’s biggest known rare earth orebody, with estimated reserves of over 10 million tons (opens in a new tab) of ore (containing REE oxides)
The deposit is primarily bastnaesite mineralization, meaning it is rich in light rare earths like cerium, lanthanum, neodymium, and praseodymium (crucial for magnets and electronics). Notably, bastnaesite ores are typically easier to mine and concentrate than clay-hosted heavy REEs, which gives Dong Pao an advantage in accessibility.
Dong Pao has been lying idle for nearly a decade due to earlier investment and permitting delays. Now, the Vietnamese government is moving to auction off multiple blocks of Dong Pao to investors as reported (opens in a new tab) in 2023 by Asia Financial.
According to an executive of Australia’s Blackstone Minerals, tenders for several mining concessions at Dong Pao were set to launch by end-2023. The plan was initially to restart mining by 2024, which would mark the first large-scale rare earth production in Vietnam’s modern history.
According to a REEx review, Blackstone Minerals has not started mining at the Dong Pao mine in Vietnam. While Blackstone has partnered with VTRE to bid for the rights to operate the mine and has expressed commitment to developing the rare earths value chain in Vietnam, including plans to build a rare earths separating plant, the project is still in the planning stages. Production was initially anticipated to occur around the end of 2024, but this timeline is likely to be delayed as we move into mid-2025.
A state-controlled miner, Lai Châu-VIMICO Rare Earth Co. (opens in a new tab) (Lavreco), holds the mining license and has been seeking foreign partners to kick-start the project as reported in The Investor finally (opens in a new tab).
Effective exploitation of Dong Pao could propel Vietnam into the top league of REE producers globally, rivaling output from the likes of America’s Mountain Pass mine, according to an expert in the USA on condition of anonymity.
Besides Dong Pao, Vietnam has several other REE deposits of note:
Vietnam Rare Earth Projects (Beyond Dong Pao):
- Nam Xe (Lai Châu, Northwest Vietnam)
Known REE occurrence, currently dormantConsidered a future development target
- Yen Phu (Yên Bái, Northwest Vietnam)
Active small-scale mining operationEstimated reserves: ~30,000 tons of REOPreviously targeted for joint development with foreign partnersProject complicated by illegal mining activities
- Muong Hum (Lào Cai, Red River Fault Zone)
Contains REEs associated with other oresRemains largely unexplored for commercial miningPotential long-term exploration target
- Coastal Mineral Sands (Quảng Ninh → Bà Rịa–Vũng Tàu)
Scattered, small REE-bearing monazite deposits along coastTypically recovered as by-product of titanium miningRich in light and some heavy REEs (e.g., cerium)Extraction limited by challenges of managing radioactive thorium
Building a Rare Earth Supply Chain: Projects and Partnerships
To turn potential into reality, Vietnam is aggressively courting investment and technology. The government has set an ambitious goal – up to 60,000 tons of REO per year by 2030 per a Reuters (opens in a new tab) accounting.
That output would be about 5–15% of China’s current production, a significant leap from virtually zero today. Achieving this will require not just mining but also developing value-added processing and manufacturing capabilities domestically.
Foreign partnerships are at the center of Vietnam’s strategy. Notably, Blackstone Minerals (Australia) has emerged as a key player by partnering with Vietnam Rare Earth JSC (VTRE) to bid for Dong Pao. Blackstone’s investment could reach $100 million if it secures a concession. The company has even preemptively ensured that it could process Dong Pao ore – Blackstone operates a nickel processing facility in Vietnam and has confirmed that the plant can handle rare earth concentrates from the mine. VTRE, Vietnam’s leading rare earth oxide producer, would operate alongside Blackstone, leveraging its existing separation plant (currently capable of ~5,000 tpa REO), which is slated for expansion.
Crucially, offtake agreements are being finalized to secure demand for Vietnam’s rare earth output. Blackstone’s executive Tessa Kutscher (opens in a new tab) noted in Asia Financial they are in talks with EV automakers VinFast (Vietnam) and Rivian (USA) on fixed-price contracts for rare earth supplies.
Securing end-users in advance would help de-risk the project by ensuring a stable revenue stream for the new mines. It’s a response to the fundamental question: will buyers pay a premium for non-Chinese rare earths? – a hurdle for any new REE project. If automakers and wind turbine manufacturers are willing to invest in supply chain security, it bodes well for Vietnam’s ventures.
Several Western and regional companies have already inked deals:
- Australian Strategic Materials (opens in a new tab) (ASM) agreed to purchase 100 tonnes of processed REOs from VTRE in 2023 and is eyeing a longer-term supply agreement. This provides Vietnam with a customer for its initial output and ASM a non-Chinese source for its advanced materials business.
- Setopia (opens in a new tab) (South Korea) is collaborating with VTRE on a pilot metallization plant to convert oxides into rare earth metals – a process currently dominated by China. Though a small $4 million project, it’s a significant know-how transfer for Vietnam’s downstream capabilities.
- In 2022, KSM Metals (opens in a new tab) (South Korea) and ASM partnered with VTRE and a Korean province to develop a rare earth mine in Yên Bái, as reported by Vietnam Briefing (opens in a new tab). That project aimed to jointly exploit a deposit (likely the same site Thai Duong was mining) and share output, highlighting Vietnam’s openness to joint ventures.
On the downstream front, Vietnam is also attracting manufacturers who use rare earths. As of 2023, South Korean and Chinese magnet firms (including an Apple supplier) have announced plans to build magnet factories in Vietnam. This is a strategic move by magnet makers to diversify production away from China and be closer to future non-Chinese rare earth sources. For Vietnam, it promises local demand for its rare earth output and potential technology spillovers. If Vietnam can produce REOs and even refined metals domestically, having magnet production in-country would close the loop to high-value finished products (like NdFeB magnets for motors).
It’s worth noting that the government itself is actively supporting the rare earth sector through policy. High-level agreements with the U.S. and others have been made to boost investor confidence. During a September 2023 state visit, U.S. President Joe Biden signed an agreement to help Vietnam map its rare earth resources and attract “quality investment.” Of course, it’s a very different world now under the Trump 2.0 administration.
At least a couple of years ago, Washington’s backing, including the elevation of U.S.-Vietnam diplomatic ties to a Comprehensive Strategic Partnership, signaled to investors at the time that Vietnam would be a priority in Western critical mineral strategies. Earlier in 2023, Vietnam’s Prime Minister approved a national plan for mineral exploitation through 2030, explicitly calling for the development of rare earth mining and processing, and set a lofty target of 2 million tonnes of rare earth ore extraction per year in the coming years. This assertive policy framework is spurring Vietnam’s state miners (like Vinacomin/Lavreco) to act after years of inaction finally. With the new tariff situation under Trump 2.0, the situation remains dynamic and unfolding, with mounting tension with China over Vietnam.
From Extraction to Refining
While the trajectory is promising, Vietnam faces significant technical and operational challenges in growing its rare earth industry. Chief among them is the lack of domestic processing capability beyond the initial concentrate stage. With current technology, Vietnam can only export raw rare earth concentrates and is currently unable to separate the individual elements or refine them into high-purity products. As REEx chronicles, separating rare earth elements is a complex, capital-intensive process involving solvent extraction and stringent environmental controls – areas where China has a decades-long head start.
Vietnam’s lone separation plant (VTRE’s facility in Hải Phòng) is limited in capacity and expertise, capable of achieving only about 40% of the processing steps required to produce usable rare earth oxides, according to Vietnam Briefing (opens in a new tab).
This falls short of the 95% purity standard the government aims for to allow exports of value-added products. Bridging this gap will require sustained investment, technology partnerships (as with Setopia or Japanese and Korean experts), and training of a skilled workforce.
Another challenge is environmental and regulatory oversight. Rare earth mining and processing can generate toxic waste (e.g., tailings with radioactive thorium and acid residues). Vietnam is keen to avoid the severe pollution that unregulated REE mining caused in parts of China.
To this end, authorities have tightened rules – for example, export of raw rare earth ores is largely restricted in Vietnam, to encourage domestic processing and prevent reckless extraction as reported (opens in a new tab) in Mining.com. In late 2023 according to Mining.com (opens in a new tab), the government made a high-profile example by arresting several industry executives for illegal mining and export practices.
Among those arrested was Luu Anh Tuan, the chairman of VTRE (opens in a new tab) (and a key figure in the Dong Pao project), accused of falsifying invoices to facilitate unreported rare earth sales to China. Also detained was the head of Thai Duong Group (opens in a new tab), a private miner that allegedly exported raw rare earth ore from its Yên Bái mine to China to evade Vietnam’s beneficiation mandate.
Authorities seized over 13,700 tonnes of illicit rare earth ore in that bust. These enforcement actions, although temporarily disruptive (they shook investor confidence and even caused Blackstone’s stock to drop 8% on the news), ultimately aim to “clean up” the sector and ensure that new projects adhere to international environmental standards. VTRE quickly affirmed its partnerships (with Blackstone and ASM) remained on track despite its chairman’s legal troubles, and Blackstone declared (opens in a new tab) it would pursue its Vietnam rare earth plans undeterred.
Finally, the market risk cannot be ignored: Rare earth prices are notoriously volatile and largely set by China. If Vietnam brings new supply online, China could respond by undercutting prices (as it did in the past) or using its near-monopoly in processing as leverage. Investors must weigh whether end-users will pay a slight premium for a non-Chinese source that meets ESG standards. So far, the geopolitical climate – with Western governments and companies eager to diversify – suggests there will be willing buyers, but the question of long-term price competitiveness remains. Analysts describe Vietnam’s 60,000 tpa target by 2030 as “ambitious, though not entirely out of the question,” emphasizing that success will depend on favorable market conditions in addition to Vietnam’s own efforts.
Geopolitical Stakes and Investor Outlook
Vietnam’s rare earth surge is fast becoming a geopolitical flashpoint. As China maintains its iron grip on rare earth production—controlling ~80% of global supply and nearly all high-purity processing—Beijing is watching Hanoi’s moves with rising unease. The planned revival of the Dong Pao mine, backed by Western capital, triggered alarm in Chinese state media, with warnings that export controls on metals were “just the start” of possible retaliation.
Tensions escalated further after the U.S. declared a rare earth–linked trade deal with Vietnam in 2025—only for Hanoi to downplay the announcement, insisting the deal wasn’t final. For Washington, integrating Vietnam into the REE supply chain is a strategic imperative to “de-risk” China. For Vietnam, it’s a delicate high-wire act: it welcomes U.S. investment and deeper ties but refuses to be cast as a pawn in the superpower rivalry. Investors should take note—Vietnam’s rise as a rare earth power will be shaped not just by geology and capital but by diplomacy, national interest, and a volatile new era of critical mineral geopolitics.
All said, the investment outlook for Vietnam’s rare earth sector is increasingly positive. Key factors for investors to monitor include:
- Project Execution and Scale-Up: How quickly can Dong Pao come online and ramp to its expected
30,000 tpa REO output? At least [forecast](https://www.reuters.com/markets/commodities/inside-vietnams-plans-dent-chinas-rare-earths-dominance-2023-09-25/# (opens in a new tab)::text=Tuan%20said%20VTRE%20hoped%20to,end%20of%202024%2C%20he%20said) in late 2023, early 2024 will be telling, as pilot processing and expert training are underway now to meet a late-2024 production start. Successful commissioning could open the door for developing other deposits (Nam Xe, Yen Phu, etc.) and reaching the 60,000 tpa national target by 2030. - Offtake Agreements and Pricing: The willingness of global tech and automotive companies to sign offtake agreements at firm prices (as seen in discussions between VinFast and Rivian) will determine the sector’s financial stability. If Vietnam’s rare earth can secure premium buyers due to ESG or supply security credentials, projects will be bankable. Conversely, any softening of demand or Chinese price cuts could squeeze margins.
- Technology Transfer and Value Addition: Investors should consider how quickly Vietnam can ascend the value chain – for example, by expanding refining capacity beyond concentrates and developing domestic magnet/metal production. Partnerships with companies like Setopia (metals) and the interest of magnet makers setting up locally are good omens. An end-to-end Vietnam rare earth supply chain (from mine to magnet) would significantly increase the value capture for Vietnamese ventures.
- Regulatory Environment: The recent crackdown on illegal mining demonstrates that Vietnam is committed to long-term regulation of this sector. Clear, consistent enforcement of rules (such as the ban on raw ore exports and adherence to environmental standards) will favor reputable companies and deter speculators. This creates a more level playing field for serious investors willing to adhere to global best practices.
- Geopolitical Support: Vietnam’s rare earth industry enjoys rare bipartisan backing on the world stage – the U.S., Japan, South Korea, Australia, and even Europe have all expressed support or interest. Multilateral initiatives or funding (for example, Japan’s JOGMEC has previously funded exploration in Vietnam) could reduce investment risk. At the same time, any escalation in the China-U.S. trade conflict involving rare earths (such as Chinese export restrictions on magnets or Western export controls on mining technology) could have knock-on effects on Vietnam. So far, Vietnam has adroitly managed to benefit from both sides – taking in investment while maintaining trade with China – a trend likely to continue.
In summary, Vietnam represents a compelling frontier for rare earth investors: a country with significant untapped resources and a government now committed to unlocking them, situated at the nexus of great-power competition over critical minerals. It is a market that may reward those with patience and a high tolerance for risk. If current projects like Dong Pao succeed, Vietnam could transform from a footnote to a major node in the global rare earth supply chain by the end of the decade. That prospect – of a new, reliable source of rare earths outside China – is driving both investor interest and geopolitical maneuvering in equal measure.
As REEx recently mused, can Vietnam emerge as the next major REE supply hub for the world, and how quickly can it scale to meet surging demand? Investors watching this space may not have to wait too many years to find out.
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