From Asia Times, December 17:
Chinese pundits say Vietnam should not directly export rare earths but send them to the PRC for processing
Following the conclusion of President Xi Jinping’s Hanoi trip earlier this week, China has claimed itself to be Vietnam’s best choice for trade and diplomatic partnerships in the Asia Pacific region.
Perhaps, but the proof will be in the pudding. Will Vietnam directly export its rare earths, as the US hopes, or send them for processing in China? Chinese pundits want to know. They also want to know whether Hanoi will lease a military port to Washington.
On Wednesday, China and Vietnam signed 36 agreements, covering the Belt and Road Initiative, development cooperation, digital economy, green development, transportation, inspection and quarantine, defense and law enforcement and maritime cooperation. But Vietnamese media said Beijing and Hanoi have failed to reach agreements on nine other issues, including metals and rare earths mining.
During his own trip to Hanoi in September, US President Joe Biden signed deals with Vietnam on semiconductors and rare earths. He encouraged US investment in rare earth exploration in Vietnam – which is ranked third in the world in its rare earths potential – to counter China’s world domination of the minerals.
Rare earths
Some Chinese pundits said China will boost trade and investments with Vietnam as long as Hanoi continues to maintain a good relationship with Beijing. They said if Vietnam is going to use US investment to explore its rare earth reserves, it should consider shipping the deposits to China for refining....
....MUCH MORE
That sounds vaguely menacing. Probably because there is a steel fist behind the velvet glove.
Previously:"A tiger economy starts to roar in Vietnam" (except for the rare earth industry corruption)
"Rare earths magnet firms turn to Vietnam in China hedge"
Well it's about time.*
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:
Another 2023 post on rare earths, this one January 14:
"Huge rare earth metals discovery in Arctic Sweden"
They aren't that rare. Just hard to find in the right proportions of the different rare earth elements. And in concentrations high enough to make extraction a paying proposition.
And requiring some technical expertise to fabricate into end products. It's not as if there are neodymium magnets just laying around...
And in 2022's "Huge rare earth reserve discovered in Turkey, but experts caution that ‘grade is king’"
Not just grade. The composition of a deposit, the amounts of the 17 rare earth elements is critical. As one example, the Mountain Pass mine in the U.S. despite its relatively high grade (8% REEs) is actually not as valuable as some lower grade mines with a more profitable mix.
Additionally, exploitation of a REE resource is highly dependent on processing and supply chain factors that can not quickly be brought into being, it's one thing to have the deposit, quite another to have, for example, the end product, a neodymium magnet.
