A New Focus

In the light of escalating geopolitical tension, the U.S. has been looking for alternative sources of rare earth elements, critical components for numerous modern technologies, including military hardware, renewables, and electronics. The growing dependence on China, which monopolizes the global supply, has seen Washington turn its attention to Vietnam, which harbors significant untapped potential.

The Vietnamese Prospect: Dong Pao Mine

Vietnam intends to operationalize its largest rare earth element mine, Dong Pao, by 2024, and is currently in the phase of attracting investments. According to the U.S. Geological Survey, Vietnam’s reserves are second only to China, yet most remain untapped due to the price distortions caused by China’s monopoly. The Dong Pao mine stands out due to its relative ease of access to these elements.

Strategic Importance Over Profits

For the U.S., the rare earth elements have transitioned from being a commercial interest to a matter of strategic significance, overshadowing the pursuit of profits. The elements, pivotal for various technological applications, have become central to sustaining industrial and technological competitiveness.

U.S.-Vietnam Collaboration

President Biden, during his visit to Vietnam, pledged support in exploration and financing to exploit these rare earth elements. The collaboration also involves plans to construct a processing plant in Vietnam, as currently, even the ore mined in the U.S. is sent to China for processing.

Enhancing Production

Vietnam, through the development of the Dong Pao mine, aims to contribute up to 15% of the global production volume, equivalent to Chinese production, by the end of the 2020s. This increase in production is not merely an economic venture but is also crucial for reducing global dependency on a single supplier, thus mitigating vulnerabilities in the supply chain.

Russia’s Position and Potential Competition

While U.S. eyes are on Vietnam, Russia holds the third-largest known reserves of rare earth elements in the world, making it another significant player in this domain. The choice to intensify geological explorations in Russia’s Far East seems increasingly pertinent given the evolving geopolitical landscape and escalating competition for rare earth elements.

The Broader Perspective on Vietnam’s Rare Earth Metals

Vietnam’s rich deposits of rare earth metals place it at the center of international attention and make it a potential key player in the global supply chain. While the investment has been hindered by prices effectively dictated by China, Vietnam’s endeavors to restart and operationalize its largest mines indicate a strategic shift.

Vietnam’s initiatives to harness its rare earth metals are not isolated to mining but encompass processing capabilities, which is crucial to adding value to the raw materials. The establishment of processing facilities is a strategic move aimed at ensuring that the country can leverage its resources effectively and reduce dependencies on external processing entities.

Conclusion

The strategic reorientation of the U.S. towards Vietnam in the pursuit of rare earth elements signifies the shifting geopolitics around these critical resources. Vietnam’s untapped reserves offer a potential alternative to the current dependencies and present an opportunity for reshaping the global supply chain dynamics of rare earth elements. With escalating competition and the emergence of new players like Vietnam and Russia, the landscape of rare earth elements is poised for significant transformation, impacting technology, defense, and international relations. The developments in this space warrant close monitoring, as they will likely have far-reaching implications in the coming years.