Mixed METS opportunity in Vietnam: Supportive government policy amid macroeconomic uncertainty

Boasting one of the world’s largest rare earth deposits, Vietnam is in a strong position to benefit from the growing global demand for these minerals.

Rare earth extraction in Vietnam has remained relatively low at 300MT. However, new projects focusing on increasing extraction are promising for the nascent sector.  

The discovery of greater critical mineral deposits, alongside newly supportive government policy, presents an emerging opportunity for Australian mining equipment, technology and services (METS) companies to capitalise on the growing Vietnamese market.

Encouraging projects that are increasing mining activity in Vietnam include:  

• 4 new bauxite mining and processing factories in Dak Nong (US$8 billion capital investment)
• Ta Khoa project, which includes a nickel mine and refinery 
• A$13.5 million ferrotungsten plant acquisition.

New mineral discoveries 

Over the past 8 years, the Vietnamese Government has discovered 110 new mineral deposits in the northwest of Vietnam. These include:

• 17 large-scale 
• 43 medium-scale
• 50 small-scale deposits. 

These findings were part of the Vietnam Department of Geology and Mineral’s new Northwest Project. The project involved a comprehensive survey of mineral resources and the completion of the 1:50,000-scale geological map of the Northwest Region for sustainable socio-economic development planning, exceeding the Department’s initial targets.

Recently, the Deputy Minister of Agriculture and Environment Tran Quy Kien highlighted the abundance of resources in Vietnam’s northwest region, and vital role of the region in the Vietnamese economy. The Minister also touched on the underutilisation of resource extraction in the region. He encouraged local authorities to continue integrating their projects into geological and mineral-related data for economic planning and investment attraction.  

Picture: The head of the Ministry of Agriculture and Environment presents the results of the Northwest Project, a comprehensive survey of mineral resources in 14 provinces in Northwest Vietnam. Photo: Nguyen Thuy.

Sustainable, efficient mineral extraction

This new centralisation for economic planning and investment attraction has been legislated in the 2024 Mineral Geology Law, which was passed by the Vietnamese National Assembly in Q4 of 2024. The law is due to take effect from 1 July 2025.

The new law aims to promote the sustainable extraction of mineral resources to enhance Vietnam’s overall national defence and security. It is designed to centralise the management of geological resources by providing a consistent framework across the whole of Vietnam in a bid to enhance state efficiency and sustainability. This approach to mineral resource management will provide greater transparency of the market opportunities throughout Vietnam.

With Vietnam’s heightened focus on resource discovery, data collection and mining industry development, this is an ideal time for Australian METS companies to enter the market and strategically position themselves for long-term growth. 

Export markets across Asia

Rising geopolitical risks in trade are presenting significant challenges for the mining sector. The US Geological Survey’s recent downgrading of Vietnam’s rare earths deposit size from 22 million tonnes to 3.5 million tonnes is also noteworthy, highlighting some uncertainty in the market’s scale. Nonetheless, Vietnam is looking to diversify mining partners and exports, positioning Australian METS companies to be trusted partners.

Vietnam’s rare earths are typically exported, with the majority going to Asian markets, including:

• Japan
• Hong Kong
• Thailand
• China.

In addition to continuing to export Vietnam’s rare earths across Asia, the government is looking to support more domestic demand for the minerals, particularly in high-end industries.

Within this context, the close Vietnamese-Australian trade relations are important to highlight. The ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP) reduce trade barriers for Australian METS companies to take advantage of the emerging opportunity in the Vietnamese market.