【By Guan察者网 Liu Bai】To reduce dependence on Chinese rare earths, many countries have set their sights on Vietnam, with South Korea being one of them.
According to a report by "Nikkei News" on December 25, South Korean company LS Eco Energy announced last week that it will invest nearly $20 million to build a rare earth processing plant in Ho Chi Minh City, Vietnam. This is the latest move by multinational companies to build a "China-free" supply chain for products such as robots and electric vehicles.
However, the report also acknowledges that challenges remain for enterprises seeking stable supplies of key raw materials, because Vietnam does not just want to be a raw material supplier. The Vietnamese National Assembly voted this month to pass a bill tightening export controls, clearly stating that mineral mining "must be synchronized with the construction of a closed-loop value chain, to avoid merely exporting raw materials."
According to the report, LS Eco Energy's $19.4 million investment is intended to provide raw materials for its planned U.S. magnet factory. Against the backdrop of the U.S. leading efforts to break China's monopoly over critical minerals, multiple multinational companies from Australia to South Korea have entered the Vietnamese mining sector.
According to a March report by the U.S. Geological Survey, Vietnam has 3.5 million tons of rare earth reserves, ranking sixth globally. This number has been significantly revised downward from the previous estimate of about 22 million tons, which had made Vietnam the world's second-largest country in terms of rare earth reserves after China.
A rare earth mine in An Phu province, northern Vietnam.
LS Eco Energy said that its metal chemical plant in Vietnam will refine rare earth oxides from global mining companies. The company pointed out that these oxides can be used to manufacture permanent magnets in robots, wind turbines, and electric vehicle drive motors.
LS Eco Energy had previously stated that its goal was to "dominate the market in the de-Chinaization era by building a metal alloy factory in Vietnam."
CEO Lee Sang-ho said, "We plan to greatly expand our business operations, entering the core strategic materials field beyond our existing cable business."
Other South Korean companies entering the Vietnamese rare earth market include Trident Company, reportedly collaborating with U.S. Zoetic Company, and POSCO, which recently entered the market.
The Vietnamese Ministry of Trade revealed that POSCO has received the Vietnamese Minister of Trade at least twice this year, and the Vietnamese side welcomed POSCO's plans to participate in the mining and refining of magnet raw materials. Australian mining company Blackstone Minerals and ASM Company have also started operations in Vietnam.
However, the Vietnamese market also presents challenges for enterprises seeking stable supplies of key raw materials. What the Vietnamese government wants is for companies investing in rare earths to establish processing plants within its borders, rather than using Vietnam solely as a raw material supplier.
In recent times, Vietnam has continuously tightened control over strategic material exports. In October, the Vietnamese government issued the "Strategic Trade Control Regulation," implementing unified control over the export, temporary import, transshipment, transit, and transfer of strategic trade goods.
The regulation explicitly states that strategic trade goods refer to mass destruction weapons, conventional weapons, and dual-use items used for the development, production, or use of mass destruction weapons, conventional weapons. Dual-use items refer to items typically used for civilian purposes but may also be used for the development, production, or use of mass destruction weapons, conventional weapons.
The Vietnamese National Assembly recently passed a bill to tighten export controls, clearly stating that mineral mining "must be synchronized with the construction of a closed-loop value chain, to avoid merely exporting raw materials."
According to a report by Bloomberg on November 11, the Vietnamese National Assembly passed legislation banning the export of rare earth raw materials. Vietnam's recent revision of the geological mineral law strengthened control over mineral resources and established new rules for the industry.
Under the new law, which will take effect in January next year, the Vietnamese government will strictly regulate the exploration, mining, and processing of rare earths and prohibit the export of rare earth raw materials. Only companies approved by the government can mine, process, and use rare earths.
The new law stipulates that Vietnam will encourage international cooperation in the research, transfer, and development of technologies for the extraction, beneficiation, separation, and deep processing of rare earths to support the development of the domestic rare earth industry.
The revised law also stipulates that the deep processing of rare earths must be combined with the development of the industrial ecosystem to enhance Vietnam's local value chain and ensure self-sufficiency in the rare earth sector.
According to information released by the Vietnamese government website, the Ministry of Agriculture and Environment is currently developing a national rare earth mineral strategy, which will be submitted to the government in early 2026.
At a regular press conference on December 19, Chinese Foreign Ministry spokesperson Guo Jia Kun reiterated that China conducts export control work on relevant items related to rare earths in accordance with laws and regulations, without targeting specific countries. As long as the export applications are compliant for civilian use, the Chinese government will promptly approve them. China is willing to strengthen dialogue and cooperation with relevant countries and regions to jointly maintain the stability of the global supply chain.
Although countries such as the U.S. and Europe have poured money into building a "China-free" supply chain, Vietnam has also tried to attract investment, but it's no easy task.
In fact, the real advantage of China's rare earth industry is not the so-called "chokehold," but an integrated, open, and market-oriented system.
China currently accounts for more than 80% of global rare earth processing capacity and over 90% of magnet production. Although the U.S. has rare earth mines like Mountain Pass, it has long lacked downstream smelting and separation technology, and the output still needs to be sent to China for processing. In terms of technical maturity, cost, and scale, Western companies cannot match China's mature supply chain.
The Wall Street Journal previously admitted that China's intimidating measures have indeed, to some extent, driven the recovery of the Western rare earth industry. However, regardless of the time required to rebuild the Western rare earth supply chain, the industry has already experienced several "false booms." The fact is that the rare earth industry outside China lacks experience and professional skills.
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Original: toutiao.com/article/7588010637104529960/
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