Mining to Vietnam

Trends and opportunities

The market

With an economic growth rate forecast of 6.3 per cent in 2017 (IMF), Vietnam is forecast for steady growth from 2017 to 2020 at around 6.3 to 6.4 per cent (Source: BMI Q4 2016). The recently approved Vietnam Power Development Plan 7 and the Vietnam Mining Development Strategy have set out the clear objectives between 2016 to 2030 as follows:

• developing a sustainable national energy and mining industry
• diversifying and securing energy and resource supplies
• making refinery and downstream processing on minerals mandatory
• address political and environmental pressures to drive economic returns to the nation

Vietnam’s key mineral endowment includes: coal, bauxite, rare earth, tungsten, titanium, phosphate rocks and iron ore.

Coal remains one of the primary energy sources for the domestic market. Vietnam turned from a net coal export country into net import country in 2016. With the rising energy demand and industry sector development, the pressure will be on coal supplies. In 2017 Vietnam expects to produce around 37 million tonnes of coal and an estimation of imported coal of over 11.7 million tonnes, mainly to supply the cement and power industry.

With the exception of coal, bauxite and titanium, most deposits discovered to date have been found to be too small to be economically viable for most international companies. Foreign investment in mining has been minimal, constrained by high royalty, regulatory issues, investment and market access challenges.

Australian interest in Vietnam’s mining sector is small but growing, largely in the management and operations of local and international mines, as well as the provision of Mining Equipment, Technology and Services (METS).

Vietnam has great coal reserves, concentrated in the northern area in Quang Ninh province and the Red River Delta basin.

Vietnam has discovered more than 5000 new minerals and deposits, reviewed a number of minerals and natural resources such as: oil and gas; coal, titanium , bauxite, phosphate rocks, rare earth, copper, gold, iron ore, mineral construction materials and some others.

Many of the open cut mines are depleting and trends are shifting toward more advanced technologies and investments in underground mining.

Major companies

The state-owned company, Vinacomin Group, which operates most of the coal mines in Vietnam produced 37 million tonnes of coal in 2016.

There are 22 open cut mines ranging from those with small capacity of hundred thousand tons up to three million tons and about 23 underground mines ranging from small capacity up to 2.5 million tons, plus a number of underground mine projects. Vinacomin is the owner and major shareholders of minerals mining businesses including:

• Sin Quyen Copper Complex
• Lam Dong Alumina and Bauxite
• Nhan Co Alumina and Bauxite

Projects including:

• Ta Phoi Copper
• Thanh Hoa Chromite
• Thai Nguyen Zinc
• Thach Khe Iron ore
• Song Hong Energy Coal
• Binh Thuan Titanium.

Another major mining company, the military based Dong Bac Corporation, produced five million tons of coal in 2016. The company also expanded business into minerals including iron ore, manganese, copper and marble.

Mining Company Profile

Read a mining company profile on Nui Phao Mining (PDF).

Read a mining company profile on KAZ Minerals (PDF)

Opportunities

Vietnam is seeking to increase production of its deeper anthracite reserves with high quality grade and expand its coal fired power sector. Specific areas of opportunities include:

• Coal supply including power generation, steel production and other industry applications
• METS across the supply chain to local and international mining companies
• Mining education and training e.g. sustainable mining, mine safety, environmental management and mineral processing.
• Transfer of The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ('the JORC Code') - a professional code of practice that sets minimum standards for Public Reporting of minerals Exploration Results, Mineral Resources and Ore Reserves.

 Australian METS have been well received by the local industry. Local, private and foreign mining operations and projects for both open cut and underground mining include:

• Lao Cai Phosphate Rock mining
• Nui Phao tungsten mine and processing plant in Thai Nguyen province
• private mineral sand mines along the coast line in the South of Vietnam from Vung Tau to Binh Thuan province
• various construction materials mines including lime stone, cement and marble.

Trade and investment opportunities

• Hoa Phat Group: coking coal and iron ore trade and investments
• An Vien Group: Thermal coal investment

Competitive Environment

The industry is dominated by the state-owned companies (Vinacomin and Dong Bac Corporation). Foreign competition from a METS perspective is largely from China, Poland, Russia, Sweden and Germany.

Tariffs, regulations and customs

The Government of Vietnam issued the Decision No 403/QD-TTg on 14 March 2016 on approval for the adjusted Master Plan for Vietnam’s Coal Industry Development to 2020 and vision toward 2030 which set the objectives and development strategies for the industry.

Vietnam’s 2011 to 2020 Minerals Strategy, including its 2030 vision, is set out in Decision 2427/QD-TTg , as approved by the government. The key directions are:

• The new Mining Law has been effective since 2012 and legal documents including the Directive No 02/CT-TTg and Decree No 15/2012/ND-CP detailing the implementation of the mining law
• The Decree No 1084/2015/UBTVQH13 dated 10 December 2015 adjusted the mineral royalty rates with the effective date from 1 July 2016 which set Vietnam as one of the world highest mineral royalty countries.

Marketing your products and services

Market entry

Australian companies need to keep regular contact with key market players and identify projects at an early stage. Companies should also maintain good relations with end-users and identify the right distribution channels.

For METS suppliers, local presence and services to customers is essential, companies should consider setting up local representation and a sales resource in-market.

For mining contractors or construction contractors, the establishment of a local operation is required when delivering services into the Vietnam market.

Complicated transaction systems, strong competition and a lack of transparency in the procurement process are constraints to ease of business within the sector. Language can also be a barrier to market entry.

Austrade in Vietnam provides Australian companies with in-market services and connects with the potential industry contacts and customers.

Download the Vietnam mining and resources profile

Links and industry contacts

Government, business and trade

Department of Geology and Minerals of Vietnam
Mining Vietnam Exhibition and Conference
Ministry of Industry and Trade
Ministry of Natural Resources and Environment
Vinacomin Group

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

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