Vietnam’s Strategic Advance: Restarting the Dong Pao Rare Earths Mine
Revival of the Dong Pao Mine
Amidst a global race for control over the rare earths sector, Vietnam is strategizing to make a significant comeback by reopening its largest rare earths mine, Dong Pao, by next year. This move is a part of Vietnam’s grand strategy to challenge China’s dominance in the sector that is crucial for powering advanced technologies such as electric vehicles, smartphones, and wind turbines. The Vietnamese government’s plan is to develop a full rare earths supply chain, which includes refining ores into metals utilized in these technologies.
Upcoming Tenders and Prospective Investors
The government is set to launch tenders for several blocks of the Dong Pao mine. Among prospective bidders is Australia’s Blackstone Minerals Ltd, which is considering a hefty investment of around $100 million in the project if it secures at least one concession. The Australian company is currently in discussions with potential clients, including electric car makers VinFast and Rivian, about possible contracts with set prices to guarantee a secure supply chain.
Vietnam’s Rare Earths Potential
According to the U.S. Geological Survey, Vietnam is home to the world’s second-largest rare earth deposits. However, these reserves have remained mostly untapped due to low prices largely influenced by China’s near monopoly on the global market. The proposed restart of the Dong Pao mine can be a significant move towards reducing dependency on China and diversifying the global supply chain.
Challenge of Refining Rare Earths
Refining rare earths is a complex process with China controlling many of the processing technologies. However, the deposits in the Dong Pao mine are relatively easy to access and are mostly concentrated in bastnaesite ores, which are typically rich in cerium and lanthanides – elements used in flat screens and magnets.
Attracting Foreign Investors
In recent years, Japanese investors Toyota Tsusho and Sojitz abandoned projects at Dong Pao due to China’s increased supply of rare earths leading to a drop in prices. However, the Vietnamese government’s new focus on developing its rare earths sector could attract foreign investors and make the country a viable player in the global market.
U.S. Support and Future Prospects
During U.S. President Joe Biden’s visit to Hanoi this month, he signed an agreement to boost Vietnam’s ability to attract investors for its rare earth reserves. This could lead to U.S. investors bidding for Vietnam’s new concessions. However, it remains unclear whether clients would be ready to pay a premium for Vietnam’s rare earths. If the Dong Pao mine restarts as planned, it could start producing around the end of 2024. Vietnam has set a target to produce up to 60,000 tons of rare earth oxide equivalent a year by 2030, making it a significant global player in the rare earths sector.
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