Vietnam's Rare Earth Ambition: Policy Tightening, Processing Push, and the Reserve Reality Check

Highlights

• A 2025 Russian policy study argues Vietnam is converting rare earths into strategic leverage through tighter licensing, domestic processing investment, and trade diversification beyond China, though recent USGS reserve revisions from 22 million to 3.5 million tons undermine the “#2 globally” narrative.
• Vietnam's true bottleneck is midstream capability—limited processing capacity, technology gaps, and workforce constraints—not resource availability, with state control and inter-ministerial oversight reflecting rare earths as a national-security priority.
• Without scalable separation/refining, credible environmental controls, and transparent resource reporting, Vietnam risks remaining a policy story rather than a genuine supply-chain alternative to China's processing dominance.

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A 2025 Russian-language policy study by S.S. Zhiltsov and V.T. Hoang of the Peoples’ Friendship University of Russia named after Patrice Lumumba argues that Vietnam is trying to convert rare earths from “ore in the ground” into strategic leverage—by tightening licensing and security reviews, steering investment into domestic processing, and using trade agreements to diversify partners beyond China. The authors frame rare earths as critical to magnets, clean energy, electronics, and defense, and they cast Vietnam as a plausible “ex-China” node—but with a major caveat: the paper’s frequently cited 22 million-ton reserve figure has been revised down sharply in recent Western reporting that cites USGS estimates, complicating the “Vietnam as #2 globally” storyline that underpins some of the policy momentum.

Background

This is a policy and literature synthesis, not a new geological or metallurgical study. The authors review Vietnam’s regulatory toolkit (investment rules, licensing, environmental controls, planning, and national-security coordination), along with official statistics and published research. The thrust: Hanoi wants more value retained at home—not just extraction, but processing and higher-value industrial linkages.

Key findings in plain English

• Vietnam’s bottleneck is midstream capability. The authors repeatedly point to limited processing capacity, technology gaps, and workforce constraints as the true limiter—not simply resource availability.
• State control is central. Projects face stricter governance and inter-ministerial oversight, reflecting rare earths as a strategic sector with national-security sensitivity, especially in border regions.
• Partnership strategy is deliberate. The paper emphasizes Vietnam’s use of trade frameworks (notably EVFTA and CPTPP) to attract investment, pull in know-how, and reduce reliance on China-centric processing.
• China remains the system’s gravity well. Even when Vietnam aims to diversify, the authors depict China’s technology and processing dominance as the reference point Vietnam must work around.

What are the Limitations

Because this is a review, its conclusions depend on cited sources and assumptions. The most consequential external controversy is the magnitude of reserves: Reuters reports that the USGS has revised Vietnam’s reserves from 22 million to 3.5 million metric tons, which would materially change long-term expectations for scale and leverage.

Implications and what should follow

Vietnam’s opportunity is real—but it’s a midstream race. Without scalable separation/refining and credible environmental controls, Vietnam risks remaining a policy story rather than a supply-chain pivot. Next steps should include transparent, independently verifiable resource reporting; enforceable environmental monitoring; and bankable project structures that prove Vietnam can capture value inside its borders without importing the sector’s pollution legacy.

Citations: Zhiltsov S.S., Hoang V.T. (2025). Vietnam’s policy in the field of rare earth metals. The Russian Journal of Vietnamese Studies, 9(4), 32–46. DOI: 10.54631/VS.2025.94-639878. Reuters, Dec 11, 2025.