Vietnam can and will be a very important player in rare earth

The US willing to help Vietnam with rare earth tender

The US is ready to offer technical assistance to help Vietnam with rare earth mining, especially the process of auction, Professor Emily Blanchard said during a media meeting in Hanoi this week.

“If Vietnam chooses to ask for our assistance in developing a an option, we would be happy to provide that assistance to do so”, she added.

Professor Emily Blanchard - Chief Economist of the US Department of State speaks at a media meeting in Hanoi, Oct. 2023. Photo: The Hanoi Times

Rare earth, as well as other critical minerals, will be in high demand as vital inputs for batteries, advanced transistors, and solar wafers, conductors, the necessary materials for decarbonization and innovation all over the world, according to Emily. 

In this context, the US chief economist believed that Vietnam can and will be a very important player.

A report by the US Geological Survey in 2022 showed that China owns the largest reserves of rare earth metals with 44 million tons, followed by Vietnam with 22 million tons.

Recently, the two countries signed a memorandum of understanding to strengthen the accounting and the measurement of rare earth elements in Vietnam, an event Emily touched on as a bright signal of bilateral cooperation in the field.

“I hope that as Vietnam chooses to develop its rare earth minerals - both mining and potentially processing - the country will do so in a way that protects the environment and ensures the well-being of its workers”, she added.

Confidence in Vietnam

Vietnam targets gross domestic product (GDP) growth of over 5 % in 2023, with an inflation rate of about 3.5 to 4%. Prime Minister Pham Minh Chinh brought out the figure at the National Assembly on Monday morning, while pledging that the Government will make many efforts to ensure that the target is exceeded.

“I have every reason to be confident in Vietnam,” the US economist said regarding Vietnam's growth target this year. 

Admitting that 2023 is a tough year for the global economy, she’s still optimistic about Vietnam, highlighting that the fundamental drivers of GDP growth and demand and supply in the country remain strong.

Emily explained her confidence by noting that Vietnam has all the fundamental drivers of long-term sustainable real economic growth including innovation, governance and environment.

“Vietnam has already shown and continues to show, not just in words, but in actions and deeds,” the chief economist asserted.

She is also optimistic about economic cooperation between Vietnam and the US in the time ahead.

US President Joe Biden's visit to Vietnam last month to strengthen bilateral diplomatic ties and the resulting upgrading of bilateral relations is expected to usher in a new era of expanded economic ties between the two countries, she said.

During the media talks, the American chief economist also named three keys for Vietnam to make it more attractive to global investors. These are workforce development, decarbonization through a green transition, and an enabling environment for business.

“Investment in the workforce and the Vietnamese people are going to be critical determinants, and we in the US want a partner in those endeavors,” she said.

Meanwhile, enterprises’ ability to source green power, as she said, would be a key determinant for many companies. “The sooner that Vietnam can generate more renewable energy, the sooner they can get it into the grid and make it available to investors.  I think that will open the door for an awful lot of investment”, Emily added.

Her third piece of advice for Vietnam is for the country to create an enabling and healthy environment for businesses, especially in the digital space.