Vietnam’s Rare Earth Potential and Reserves
Executive summary
Vietnam has long been touted as a rare-earth heavyweight but recent authoritative data have punctured the hype: the U.S. Geological Survey sharply revised Vietnam’s reserves down from around 22 million tonnes to roughly 3.5 million tonnes, moving Hanoi from near the top of global rankings to about sixth place [1]. Nevertheless, substantial deposits remain, concentrated in the northwest and certain coastal sands and clays, and Vietnam is pursuing policy, licensing and production programs to convert geological potential into supply-chain reality even as technical, environmental and governance hurdles persist [2] [3] [4].
1. The numbers changed — what was revised and why it matters
A January USGS revision reduced Vietnam’s reported rare-earth reserves from widely cited figures near 22 million tonnes down to approximately 3.5 million tonnes, a change the agency said reflected new information and updated government and company data [1]; the downgrade shifts Vietnam behind China, Brazil, India, Australia and Russia in USGS rankings [1]. That numeric correction matters because earlier narratives that positioned Vietnam as a near-equal counterweight to China relied on the larger figure, and investment, diplomacy and industrial strategies have been framed around those expectations [5] [6].
2. Where the remaining resources actually sit and what they contain
Vietnam’s REE occurrences are concentrated in the Northwest Highlands (notably Lai Châu’s Dong Pao), the Central Highlands and in coastal mineral sands and clays, with a mix dominated by light rare earth elements (cerium, lanthanum, neodymium, praseodymium) and smaller pockets of heavy REEs in certain deposits, according to geological surveys and industry accounts [2] [3] [7]. Official and industry sources have variably described the Dong Pao area as among the largest domestic orebodies, with historical estimates attributing millions of tonnes of ore or oxide-equivalent to that site, though reported figures vary across sources and over time [2] [3].
3. Production reality versus geological potential
Current output remains modest: production figures cited by USGS and press reports put extraction at a few hundred to a few thousand tonnes of rare-earth oxide equivalent in recent years, far below the scales implied by earlier resource tallies [1] [8]. The government has set ambitious targets — plans to raise raw ore output to over 2 million tonnes per year by 2030 and longer-term production goals through 2050 — but those plans confront technological and permitting bottlenecks that mean mass production and downstream refining are not yet realized [8] [9].
4. The hard part: processing, technology and governance
Analysts and diplomats warn that having ore is only half the battle: refining rare earths to the high-purity oxides and separated elements used in magnets and military applications requires specialized metallurgy and chemical processing capacity where Vietnam currently lags, leaving it exposed to dependence on external partners or China’s mature supply chain [10] [11]. The state has proposed legal and regulatory reforms to treat REEs as strategic resources and to create a dedicated framework for management and licensing, reflecting both commercial ambition and security caution [4] [12].
5. Risks, incentives and the geopolitics of expectation
The sudden downward revision exposes a tension between domestic and international narratives: Vietnamese authorities and some industry commentators have promoted very large reserve numbers to attract investment and strategic partners, while external re-evaluation by USGS and others has tempered those claims; this dynamic creates upside for investors betting on policy-driven expansion but also raises the risk of stranded expectations and reputational blowback if projects cannot scale or environmental safeguards fail [6] [1] [9]. Moreover, arrests and governance questions in the sector have been reported, adding a political risk overlay to commercial plans [1].
6. Bottom line: potential remains, but it is substantially smaller and conditional
Vietnam still holds meaningful rare-earth resources that make it a candidate supplier beyond China — an attractive prospect for nations diversifying critical-mineral supply chains — but the scale is now more modest than earlier headlines suggested, and conversion of reserves into reliable, refined exportable materials depends on technology transfer, heavy investment, legal reforms and environmental management that are not yet complete [1] [4] [11]. Publicly available reporting to date documents the reserve revision, regional geology, policy ambitions and production targets, but gaps remain in independently verifiable, project-level reserve accounting and long-term processing capacity data [1] [3].