Securing a stable supply chain has emerged as the top priority surrounding 'rare earth elements,' the core materials of future energy industries such as electric vehicles and wind power generation.
Vietnam is a rare earth resource-rich country with the second-largest rare earth deposits after China. To break away from the current Chinese monopoly system, Vietnam is expected to become an even more important strategic hub. Although Vietnam ranks second in the world with 22 million tons of rare earth deposits, its production volume is only about 4,000 tons annually, ranking sixth.
The recent global attention on Vietnam's rare earths is due to China's declaration of weaponizing rare earths, which hold the largest deposits worldwide, prompting countries around the world to seek alternative markets. Following President Yoon Suk-yeol in June, U.S. President Joe Biden visited Hanoi, Vietnam, in September and agreed to strengthen mutual cooperation to attract investment for the development of Vietnam's rare earth industry.
According to foreign media on the 25th, Vietnam announced plans to reopen Vietnamese mines capable of competing with the world's largest mines as part of broad efforts to weaken China's dominance over rare earths. Among Vietnam's plans, the Dong Pao mine, classified as one of the world's largest mines and under the mining rights of VTRE, was selected.
Regarding the Dong Pao mine, Luu Anh Tuan, CEO of Vietnam VTRE, stated in an interview, "VTRE plans to take on roles throughout the entire rare earth industry, from ore extraction at the Dong Pao mine to neodymium metal manufacturing," and explained, "The plant located in northern Vietnam has an annual oxide refining capacity of 5,000 tons, but plans to expand its capacity to 15,000 tons annually to refine rare earth oxides from the Dong Pao mine."
Additionally, Tessa Kutscher, an executive at Australia's Blackstone, announced plans to invest approximately $100 million in the Dong Pao mine in Vietnam. Furthermore, the development project of Vietnam's rare earth industry has attracted significant domestic interest.
In June, the government signed a Memorandum of Understanding (MOU) on establishing a 'core mineral supply chain center' during the Vietnam summit. On the same day, the Korea Institute of Geoscience and Mineral Resources (KIGAM) also signed an MOU with the Vietnam General Department of Geology to develop technology for utilizing core mineral resources and support domestic companies' entry into the local resource industry.
Consequently, the activities of domestic and foreign companies operating in Vietnam have drawn attention domestically. Notably, Seongan, which established a metal factory in Vietnam, and Setopia, which completed the value chain using Vietnam-sourced rare earth oxides for the first time in Korea, are regarded as leading pioneers.
Seongan, which has been promoting a new rare earth business since early this year, passed quality tests for rare earth metal prototypes on the 20th, laying the foundation for full-scale mass production and sales. It also secured a large-scale power supply of 3,000 KW (kilowatts) necessary for neodymium (NdPr) metal processing from the Binh Duong Provincial Power Authority.
The Binh Duong factory currently has an annual production capacity of 144 tons of neodymium metal. Seongan plans to bring in additional production facilities to expand capacity to 720 tons by October this year and up to 2,000 tons next year.
Seongan announced plans to advance its rare earth permanent magnet business, which is valued highly, and is working to convert its Daegu factory, previously engaged in the textile business, into a rare earth permanent magnet manufacturing plant.
rare earth elements
Setopia is intensifying its rare earth business centered on GCM Global Critical Material Limited., a joint venture with Vietnam Rare Earth JSC (VTRE), a Vietnamese rare earth raw material company.
VTRE is a rare earth refining specialist located in Phu Ly City, Ha Nam Province, Vietnam, and holds mining rights to the Dong Pao mine, which is considered one of the world's largest mines. In addition to the Dong Pao mine, VTRE holds mining rights to a total of four mines, including Nam Xe, Yen Phu, and Ben Den.
Notably, VTRE's own Ben Den mine contains heavy rare earths such as terbium (Tb) and dysprosium (Dy), which have high added value and are traded at high prices, with approximately 15,000 tons of rare earth oxides reportedly deposited.
Setopia is establishing a local subsidiary and factory in Vietnam through GCM Vina, a subsidiary of GCM established as a joint venture with VTRE. The first test production of neodymium metal is scheduled for the end of October after establishment. Once testing is complete, GCM, supplied with oxides from VTRE, will produce neodymium metal at the local GCM Vina factory, then transport it to Korea, where KCM Industry will process it into neodymium permanent magnet powder, followed by NS World producing neodymium magnets.
A Setopia official said, "We will devote ourselves to ensuring that the establishment of the GCM Vina Vietnam factory and the neodymium metal production schedule proceed without setbacks," adding, "We aim to develop independent technology and grow into a global company by cooperating more closely with VTRE, which is attracting worldwide attention, so that global interest does not end in Vietnam but extends to domestic companies producing neodymium permanent magnets."
A domestic rare earth industry insider said, "Seongan and Setopia are representative companies that have proactively entered the Vietnam rare earth market and are establishing their business foundations," and added, "As the government has decided to strengthen economic cooperation with Vietnam regarding rare earths, it is expected that domestic companies' rare earth businesses will also gain momentum."
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