An exploration site for rare earth in the northern province of Lào Cai. VNA/VNS Photo Quốc Khánh

HÀ NỘI — Việt Nam's rare earth mining industry will likely experience rapid growth in the near future, according to industry experts, as demand has been on the rise steadily in the last few decades.

According to Asia Briefing, a consultant service for investors in Asia, rare earths are essential elements for the production of various products, including cancer drugs, smartphones, and renewable energy technologies, most notably EV batteries.

As the global economy makes a shift to greener and more environmentally friendly energy, rare earth has become a much sought-after commodity on the international market.

According to several studies, China could possess up to 90 per cent of the entire world's reserve of rare earth. As trade tension has been on the rise between China and the US, more companies have been looking for an alternative for Chinese rare earth in a hedging attempt.

According to Reuters, South Korean and Chinese magnet firms, including an Apple supplier, are set to open factories in the Southeast Asian country.

"South Korea's Star Group Industrial (SGI) and China's Baotou INST Magnetic would join companies in sectors as varied as electronics and automobiles in shifting assembly lines against a backdrop of increasing trade restrictions, with clients even requesting the move," the newswire service reported

Việt Nam's rare earth reserves, which are second only to that of China and estimated at 20 million tonnes, remained largely untapped. The country's reserves are mainly distributed in the Northwest region of the country while rare earth mining is mainly concentrated in the Northwest and Central Highlands.

According to Asia Briefing, Việt Nam and Japan have forged a close collaborative link in discovering and extracting rare earth. The rare commodity was reportedly found in a number of provinces across the country including Lào Cai, Yên Bái, Hà Giang, Cao Bằng, Lạng Sơn, Nghệ An, Kon Tum and Lâm Đồng with the highest known volume in northern Lai Châu Province.

In December 2014, a licence was granted to the Lai Châu Rare Earth Joint Stock Company and their Japanese partner to start the extraction of rare earth ores from a site in the province, which was said to be capable of large-scale industrial operation.

Last September, the province hosted a delegation of South Korean experts on rare earth mining to discuss the potential of investment.

The Southeast Asian country has still a long way to catch up to its northern neighbour, said industry experts.

According to Reuters, SGI's Vietnam project, for instance, targets 2025 output of 5,000 tonnes of high-end neodymium (NdFeB) magnets per year, enough for 2 million electric vehicles (EVs). However, the country produces just 1 per cent of the world's magnets, showed Adamas Intelligence data cited in a US Department of Energy report, compared with China's 92 per cent.

The country also faces daunting challenges in accessing advanced processing technologies and investment capital.

Interest, however, has been growing as countries scramble to secure supply of the critical minerals. Việt Nam also enjoyed other advantages such as low labour costs and market access afforded by multiple major trade deals including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Việt Nam Free Trade Agreement (EVFTA) and the Regional Comprehensive Economic Partnership (RCEP). VNS