How to Leverage the Power of Rare Earth Elements?

20 March, 2025

Illustration photo.

REPORTER: Sir, if we consider the US-initiated tariff war as a global “gamble,” how can Vietnam negotiate with its rare-earth advantage to avoid being disadvantaged?

PROF. HA TON VINH: I believe Vietnam holds a significant bargaining chip and can proactively engage in the tariff dispute. Vietnam is known to possess the second-largest rare-earth reserves globally, a strategic advantage that not many countries can claim. However, extracting these rare-earth minerals requires modern machinery and technology.

Currently, China has the necessary technology for extraction, but they stipulate that Vietnam must sell these products to them. The US is also keen to invest in this sector in Vietnam, but their technology is prohibitively expensive. Hence, Vietnam faces a dilemma in deciding which path to take.

I understand that Vietnam has recently discussed this matter with South Korea, and their businesses have expressed enthusiasm about investing in machinery and technology for rare-earth extraction in Vietnam, followed by preliminary processing before sale.

If Vietnam successfully engages South Korean or Japanese companies to invest in rare-earth extraction and preliminary processing, we can then propose that the US provide human resources training in this field. This would help reduce the trade deficit between our countries while also meeting Vietnam’s needs.

– Some suggest that this should be a driving force to build, improve, and develop the semiconductor industry with higher technology content and surplus value. What are your thoughts on this opinion?

– With our rare-earth advantage, Vietnam is attracting foreign investment in semiconductor technology. However, before considering this, we need to focus on investing in rare-earth mining and processing technology. In fact, rare earths are crucial for semiconductor technology, one of the hottest industries today.

Thanks to semiconductor technology, the world’s information can be condensed into a single chip. The most important aspects of semiconductors are speed, miniaturization, and sensitivity. Only four countries currently possess leading semiconductor technology: the US, the Netherlands, Japan, and South Korea.

While China has a strong position in rare-earth reserves and extraction, it is losing its advantage as the leading semiconductor countries are reducing or withholding the sharing of extraction and refining technology. China’s move to restrict the export of two rare-earth metals to these countries is a retaliatory measure.

Without access to this technology, China’s rare-earth extraction capabilities will become outdated. Vietnam now has a clear advantage, and Japan and South Korea are eager to partner with us in rare-earth exploration, presenting a valuable opportunity.

We have also set our sights on becoming a destination for top semiconductor companies. These factors can attract foreign investors to our strategy of capitalizing on foreign investment in semiconductor technology. But without advanced exploration technology, rare-earth minerals will remain untapped.

Therefore, the goal of developing the rare-earth industry should be to promote synchronous, effective, and sustainable development in mining, processing, and utilizing these minerals. This approach will enable Vietnam to enter the semiconductor value chain with confidence.

– If we consider rare-earth cooperation as a strength that Vietnam can use for bargaining or negotiation, what should we keep in mind?

– International cooperation today is based on the “win-win” principle. Therefore, in any negotiation or agreement, the first consideration should be what each country can offer, ensuring a balance of needs and interests.

Additionally, cooperation should be based on equality, harmony, and mutual benefit. Vietnam has the “economic weapon” of rare-earth minerals, but we cannot give them away unconditionally. We must find countries with advanced technology and a professional approach to exporting refined ore or products, not just raw materials.

The days of exporting raw materials like coal and crude oil to earn foreign currency are long gone. Vietnam has the capacity to maximize the value of its diverse resources and should view them as a means to develop with the highest possible added value, driven by Vietnamese intelligence.

In the long run, we must never sell our resources short. Vietnam should not rely primarily on rare-earth minerals but rather view them as a stepping stone to achieving our goals.

– Thank you, sir.

The most advanced rare-earth extraction and refining technologies are currently possessed by countries like the US, Japan, and South Korea, with whom Vietnam has comprehensive strategic partnerships. This provides a foundation for accessing their technology through economic cooperation frameworks, either through purchases or technology transfers.

Thanh Ha (implementation)

– 07:00 14/03/2025