US unrealistically boosting Vietnam's rare earths
Rare earth exploitation is notably among the key cooperative projects agreed by Washington and Hanoi during US President Joe Biden's state visit to Vietnam earlier this month.
The two sides signed a memorandum of understanding on strengthening technical cooperation to support Vietnam's efforts to quantify its rare earth resources and economic potential, and attract quality investment for the integrated development of the rare earth sector.
While the United States and other Western countries are trying to end their reliance on China's rare earths, the Vietnamese government plans to restart its largest rare earth mine along with some other rare earth mines next year.
According to data of the United States Geological Survey, Vietnam has the world's second-largest rare earth deposits, which remain largely untapped. As rare earths are crucial to the semiconductor industry, Vietnam thus has huge potential as a major player in the semiconductor industry in the future.
However, as some experts say, there remain great difficulties for the US to end China's leading role as the largest supplier of rare earths in a short time.
It is not an easy task for Vietnam to independently extract and process rare earths. Rare earth extraction is complicated, and China controls many core processing technologies. Even the US, as a major importer of rare earths, has no local rare earth processing plants, and it can only export rare earth ores to China for processing. It is also unclear whether there are US companies willing to pay a premium to develop the mines in Vietnam, as the country's rare earth sector generally remains opaque.
So there is a long way to go for Vietnam to commercialize its rare earth reserves in a short time. Not only is the development cycle long and the environmental cost high, but also neither Vietnam nor the US has the advanced smelting and separation technologies.
China produces 90 percent of the world's refined rare earths, and more importantly, it dominates the industry of rare earth smelting and separation. Its cost advantages, which have been accumulated over decades, will not be easily outcompeted by the US' limited input in Vietnam's rare earth industry.
Washington should realize that before the US became increasingly unscrupulous in carrying out its China-containment strategy, China had never even thought of leveraging its strengths in rare earths as a "choke point" on the US.