Iftah Al Aqliyah
AS THE WORLD moves towards a green energy future, demand for critical minerals such as nickel, silicon, lithium, copper, and other rare earth elements (REE) is increasing because these are the key components in the production of products like electric vehicles (EVs), wind turbines, and solar panels. Located in Southeast Asia, Vietnam, is a major market for China, the US, Japan, South Korea, and the European Union. Beyond being a key market, the aspiring economic power also serves as a strategic partner in the region’s energy transition. The critical minerals project supports the development of green energy technology industries, boost environmental standards and place the nation in the map of global clean energy transition. This is evidenced by Vietnam’s commitment to achieving net-zero carbon emissions by 2050 at the COP26 Summit in Glasgow and the receipt of funding through the Just Energy Transition Partnership (JETP) program amounting to US$15.5 billion, while also launching the Power Development Plan VIII (PDP8). However, Vietnam faces significant challenges in meeting domestic demand for critical minerals and ensuring sustainable management.
Increase in Critical Minerals in Vietnam
Vietnam’s participation in commitments under the Action program for Transition to Green Energy and Mitigation of Carbon Dioxide and Methane Emissions from Transport is driving major development in renewable energy in 2021-2050. On a regional scale, projections from APEC Outlook show that the expansion of clean energy generation and electric vehicles (EV) will increase demand for critical minerals such as nickel, copper, cobalt, lithium, silicon and rare earth elements (REE) in the Asia Pacific region, including Vietnam. Demand for critical minerals on a regional scale is expected to increase in 2031-2040 compared to 2020 by 4.7 times (Huy, 2023). According to Phung Quoc Huy et al. (2024) total critical minerals demand is expected to reach 415 kilotons (kt) from 2021 to 2030 and increase to 2,133 kt from 2031 to 2050, or 15 times the 2021 level. Silicon and copper are the minerals most in demand due to the expansion of solar energy and the construction of power grids. It is estimated that copper accounts for 60% of total mineral demand, particularly for transmission systems, wind turbines, and electric vehicles (Huy et al., 2024). In addition, the need for nickel, cobalt and lithium for electric vehicle batteries will increase, especially as the local automotive industry such as VinFast grows. Although Vietnam has the second largest REE potential in the world, its use is still not maximized in terms of value-added exploration, production, processing and export.
Challenges in Critical Minerals Management
Vietnam’s domestic processing capacity : The nation’s domestic processing capacity is still low despite having many mineral reserves. Production of nickel, cobalt and copper has not met the surging demand. According to statistics, Vietnam produced only 16,881 tons of copper in 2021, despite demand for copper reaching more than 260,000 tons during the 2021-2030 period (Huy et al., 2024). On the contrary, cobalt production in the country is still below 200 tons per year.
Infrastructure and Technology Limitations: Vietnam has not successfully mastered the refining technology of minerals such as REEs that require complex and expensive chemical processes. Most mining facilities in Vietnam focus on extraction, not downstream. This hinders Vietnam from developing domestic value and acting as a value-added global supplier (Hiep, 2023)
Weak Regulation in Vietnam: The regulatory framework in Vietnam is still not strong and inconsistent in its implementation which hinders the overall development of the minerals sector. The complexity of licensing procedures, poor inter-agency coordination, and corrupt practices at the local and national levels exacerbate the investment and environmental monitoring situation. These conditions create hesitation for local and foreign investors (Dung et al., 2021).
Political Pressure and Dependence: Vietnam’s REE potential has attracted the attention of major countries such as the United States, China and Japan. For example, Vietnam signed an MoU with the US on a partnership for REE exploration and development (Nguyen et al., 2019). This joint venture certainly offers benefits and investment opportunities, but there is a risk of external dependency and possible exploitation of natural resources without fair and sustainable technology transfer.
Vietnam’s ability to manage critical minerals is crucial to the continued transition to renewable energy. Rising interest in lithium, cobalt, copper and REEs is a result of reducing carbon emissions. However, limited production, infrastructure and technology, and weak regulations are barriers to achieving certain targets. Therefore, Vietnam needs to make necessary refomrs by strengthening policies and building sustainable international cooperation.
(Iftah Al Aqliyah is an intern at COGGS and student at Department of International Relations, UPN “Veteran” Jawa timur University, Surabaya, Indonesia)
References
Dung, N. T. K. D., Luan, P. V., Chinch, V. T., & Duoe, T. V. (2021, November 10). An Overview of Rare Earth Ores Beneficiation in Vietnam. 10.29227/IM-2021-02-20
Guthrie, C. (2023, October 23). Rare earth arrests rock Vietnam’s critical minerals plans. Mining Magazine.
Hiep, L. H. (2023, November 8). Vietnam’s Rare Earth Ambitions: Economic and Strategic Drivers. FULCRUM. Retrieved Juli Jumat, 2025, from https://fulcrum.sg/vietnams-rare-earth-ambitions-economic-and-strategic-drivers/
Huy, P. Q. (2023). Estimation of Required Critical Minerals for Clean Energy Technology in the APEC Region and Risks of Supply Chain Disruption. Asia Pacific Energy Research Centre. https://www.researchgate.net/publication/378302856_Estimation_of_Required_Critical_Minerals_for_Clean_Energy_Technology_in_the_APEC_Region_and_Risks_of_Supply_Chain_Disruption
Huy, P. Q., Sweetnam, G. E., & Hien, T. T. (2024). Shifting Toward Clean Energy Technology: Assessing Vietnam Critical Minerals Demand and Domestic Resources. IOP Conference Series: Earth and Environmental Science. 10.1088/1755-1315/1395/1/012001
Nguyen, N. B., Boruff, B., & Tonts, M. (2019, June 27). The Regulatory Framework and Minerals Development in Vietnam: An Assessment of Challenges and Reform. MDPI, 11. 10.3390/su11184861
Nguyen, U. (2023, April 13). Vietnam’s Rare Earth Mining Industry: An Overview. Vietnam Briefing. Retrieved July 25, 2025, from https://www.vietnam-briefing.com/news/rare-earth-mining-vietnam.html
