TELF AG examines the dynamics of the Asian rare earths market
The growing importance of rare earths
When it comes to rare earth minerals, the most automatic association is certainly the one with China, and for a very specific reason. Beijing produces more than half of the world’s rare earth minerals and has cutting-edge facilities for the extraction and processing of these precious resources (and many others). This advantage represents the fruit of very precise political planning, which has led China to also equip itself with 39 metallurgy universities and a large number of professionals specialized in everything to do with minerals and their possible industrial applications. Furthermore, the strengthening of refining capacity has allowed China to gain a leading position, which has transformed it into one of the major global players in the complex raw materials market.
In the same region of the world, however, there is an Asian weight that is gradually building a solid reputation in the raw materials sector, and in particular in the extraction of those same rare earths for which China is so famous. We are talking about Vietnam, which, over the last few years – also through prestigious international partnerships – has continued to strengthen its economy by focusing on rare earth minerals in the hope of relaunching and consolidating it more and more.
It is no coincidence that rare earths continue to attract the attention of the major players in the sector: their possible industrial applications include not only those linked to the creation of screens for smartphones but, above all, those directly connected to the manufacture of batteries for smartphones and electric vehicles. In a certain sense, rare earths could indeed be considered one of the main drivers that will make the global energy transition possible. Vietnam already has the world’s second-largest reserves of rare earths and relies on collaboration with its international partners to develop this strategic sector for its economy further.
Asian nations have large reserves of these raw materials but do not yet possess the engineering abilities and the most suitable specialists to bring the rare earth extraction process to an even more advanced level. In order to give an idea of the importance of rare earths in Vietnamese economic planning, it will be enough to take a look at some data: according to the US Geological Survey, in 2022, Vietnam would have even increased its extraction of rare earths tenfold, going from 400 tons of 2021 at 4,300 last year. The government of Vietnam seems to have clear ideas: the intention is to extract and process 2 million tonnes of rare earth minerals by 2030 and to reach an annual production of 60,000 tonnes of rare earth oxides from 2030 onwards.
World powers such as South Korea, the United States, and Japan are already working with Vietnam in an attempt to strengthen its rare earth mineral industry, and the first results have already arrived. In September, during US President Joe Biden’s visit to Vietnam, the two nations signed a memorandum of cooperation in the rare earth mineral sector, while in June, South Korean President Yoon Suk Yeol signed another similar agreement focused on the development of a joint venture of the rare earth mineral industry. China is also actively collaborating with Hanoi to give a new boost to the local rare earth industry, mainly through the modernization of railway lines and their connections with the country’s ports, thus contributing to the increase in exports.
