Well it's about time.*
From Reuters, August 22:
HANOI/SEOUL, Aug 22 (Reuters) - Korean and Chinese magnet firms, including an Apple supplier, are set to open factories in Vietnam, according to documents and people familiar with the plans, amid a push to diversify supply chains away from China and defend against Sino-U.S. tension.
South Korea's Star Group Industrial (SGI) and China's Baotou INST Magnetic would join companies in sectors as varied as electronics and automobiles in shifting assembly lines against a backdrop of increasing trade restrictions, with clients even requesting the move, the people said.
China is dominant in magnets and the rare earth metals they are made from. The magnets are central to the manufacturing of such products as electric vehicles, wind turbines, weapons and smartphones, making the sector strategically important. Even so, there has been only limited effort to challenge China's lead.
Neighbouring Vietnam, however, has untapped rare earth deposits second only to China's, as well as a fledgling processing industry, giving the country the potential to be a much bigger competitor, industry insiders said.
SGI's Vietnam project, for instance, targets 2025 output of 5,000 tons of high-end neodymium (NdFeB) magnets per year, enough for 2 million electric vehicles (EVs).
Still, Vietnam produces just 1% of the world's magnets, showed Adamas Intelligence data cited in a U.S. Department of Energy report, compared with China's 92%.
Moreover, some Chinese factories can produce 10 times as many magnets as SGI's project, and China dominates the mining and processing of the ores.
Nevertheless, Vietnam's rise is significant....
And as noted in "Rare Earths: Reminder, Combined Brazilian and Vietnamese Resource Base Approximately Equals China's Proven and Probable Reserves":
Mining
the stuff is relatively straightforward. The huge difference is that
Brazil and Vietnam do not have the refining and fabricating
infrastructure that China does....
Here's the US Geological Survey's Mineral Commodity Survey - Rare Earths - 2021:
Reserves[Data in metric tons of rare-earth-oxide (REO) equivalent content unless otherwise noted]
Brazil 21,000,000
China 44,000,000
Vietnam 22,000,000
You will note that Vietnam and Brazil's combined resource roughly equals China's....
And July 2020's "Digging in on rare earth, the next front in the US supply chain war with China":
Letting China take over the world's pharmaceutical and medical manufacturing over the last 25 years was pretty damn stupid.
Ditto for rare earth supply/
The stuff is everywhere, Vietnam's undeveloped rare earth resource base is tied with Brazil for #2 in the world (combined they match China).
The risk Vietnam poses to China's lock on rare earth prices has suddenly gotten very interesting.
It has to be developed though....
And June 2019
Vietnam Rising: "US-China trade war pushing Vietnam’s manufacturing industry to capacity"
A major piece on the country The Diplomat says will be the testing ground for China's military, prior to an invasion of Taiwan. See last month's "China Will Attack Vietnam".
Throw in Vietnam's undeveloped rare earth resource base, tied with Brazil for #2 in the world (combined they match China) and the risk it poses to China's lock on prices and Vietnam has suddenly gotten very interesting.
Oh, and China is still smarting from being unable to achieve their goals during the 1979 invasion of Vietnam....
We have some experience with this stuff, both long and short, out in public on the blog for all the world to see. Here's a quote, first used in late 2010 as the last mania was just getting started, from a very good book on investing, that was our lodestone (mining/magnet term) through the last mania.
And a 2015 post looking back to those halcyon days:
Rare earth metals: Objects of power and risk
Just the words, "Rare Earth" brings back memories: “My old MG TC. A blond girl, tan from the summer sun, in the Hamptons, beer on the beach, ‘Unchained Melody,’ the little bar in the Village.”
Uh, wait. That was Adam Smith in our 2012 post "Adam Smith on Oil Shale (Now with Voodoo Beach Bunnies)". Ahem. Never mind.
Our memories are more like trading Molycorp for three triples, short and long, on the blog, in public, from IPO to bankruptcy or if you will "From tombstone to tombstone".
Or commenting on the passing parade: Luxembourg-based Rare Earth Company Hoping to Mine in South Africa by 2014 Does Oversubscribed IPO in Toronto (FRO.tsx), or quoting one of the, if not the, best books on investing and life:
