Vietnam’s Critical Minerals Industry and Supply Chain

Vietnam’s critical minerals include bauxite-alumina, tungsten, and rare earths in the Central Highlands and northern provinces. The 2024 Geology and Minerals Law and tax incentives are opportunities to improve project transparency and returns on investment, but logistics bottlenecks constrain full value-chain development.

FIND BUSINESS SUPPORT

Transform Information into Strategy with Tailored Intelligence

Vietnam’s critical minerals industry is a pivotal sector, boasting a rich resource base that includes significant reserves of bauxite, tungsten, and rare earth elements. With the 2024 Geology and Minerals Law and corresponding tax incentives, the country aims to enhance transparency and investment returns.

However, challenges such as logistics bottlenecks hinder the full potential of the supply chain. As Vietnam seeks to expand its production and processing capabilities, efforts are underway to address regulatory frameworks and improve infrastructure, positioning the nation as a key player in the global minerals market.

See also: Vietnam’s Semiconductor Industry: Progress and Outlook Beyond 2025

Potential and resource base

Vietnam is endowed with various types of critical minerals that are essential to the modern manufacturing industry. According to the US Mineral Commodity Summaries 2025 , Vietnam ranks among the top producers of several major minerals:

Bauxite

Vietnam holds 5.8 billion metric tons of bauxite reserves, which is nearly one-fifth of the world’s total. Its deposits are concentrated in the Central Highlands of Dak Nong and Lam Dong provinces.

Dak Nong alone contains 73 percent of total bauxite reserves, and Lam Dong holds close to 1 billion tons of bauxite. The state-owned Vietnam National Coal and Mineral Industries Group (VINACOMIN) manages 260 million tons of these reserves.

Tungsten

The Nui Phao mine in Thai Nguyen Province is the country’s main tungsten operation and one of the largest outside China. It holds 44.1 million metric tons of ore with a remaining mine life of 12 years. At present, it produces nearly all of Vietnam’s 3,400 metric tons of tungsten annually.

Antimony and titanium

FIND BUSINESS SUPPORT

Boost Your Growth by Expanding into Asia’s Rapidly Growing Markets

Vietnam’s antimony sector combines upstream mining and midstream processing. Vietnam produces antimony concentrates with an estimated market value projected to reach US$23.83 million by 2034, growing at a 35 percent compound annual growth rate.

Vietnam’s titanium production rose 10 percent in 2022 to 331,500 metric tons (mainly in ilmenite and leucoxene concentrates).

Other minerals and offshore potential

Vietnam also produces zinc, tin, manganese, lead, bismuth, and copper, though their reserve assessments remain limited. Geological surveys show the potential for polymetallic Fe-Mn deposits along Vietnam’s continental shelf. The government has initiated exploration programs in coastal and offshore areas, but commercial development is still in its early stages.

Regulatory and legal framework

Vietnam’s Law on Geology and Minerals 2024 has reformed and liberalized the mining sector. It introduces a four-tier classification of mineral resources.

The Ministry of Natural Resources and Environment (MONRE) oversees geological surveys, licensing, and exploration. It issues concessions for up to 30 years, extendable to 50 years for projects of strategic importance.

The law requires most mining rights to be awarded through competitive auctions only. Though it also provides for exemptions to national priority projects, public-private partnerships, or established processing facilities.

From August 2025, projects are also mandated to meet green taxonomy standards to access incentives of preferential loans or land-use benefits. The law presents a favorable outlook for inviting foreign participation through joint ventures and inter-governmental agreements. The State will continue to maintain ownership of strategic mineral resources, but it allows foreign companies to participate under proper terms and conditions.

Processing capacity and expansion plans

Vietnam’s mineral processing capabilities remain concentrated in upstream extraction with limited downstream value addition. There are still gaping holes in processing raw ores into higher-value refined products.

Bauxite and aluminum projects

FIND BUSINESS SUPPORT

Identify Business Risks with Entity Health Checks and Partner Review Services

Vietnam’s targets for bauxite exploitation are among the most formidable in Asia. The government plans to extract 114.5 million tons per year between 2021 and 2030, rising to 118 million tons annually for 2031-2050. The plan has deep processing targets of 11.6-18.65 million tons of alumina and 120,000-150,000 tons of aluminum ingots annually by 2030, increasing to 12-19.2 million tons of alumina and 225,000-245,000 tons of aluminum by 2050.

To support these goals, VINACOMIN has allocated US$7.3 billion for new projects in Dak Nong Province. It intends to expand the Nhan Co Alumina Complex to 2 million tons per year by 2029 and construct the Dak Nong 2 Bauxite-Alumina-Aluminum Complex, which will produce 2 million tons of alumina and 0.5 million tons of aluminum annually before 2030.

Tungsten processing

Masan High-Tech Materials (MHT) is operating advanced tungsten processing at the Nui Phao Complex. It produces high-purity tungsten chemicals like ammonium paratungstate (APT), yellow tungsten oxide (YTO), and blue tungsten oxide (BTO), which are approved by the Ministry of Industry and Trade, making Vietnam one of the few producers outside China capable of refining tungsten chemicals.

Rare earth elements (REEs)

Vietnam’s rare earth industry remains limited to basic processing stages. Current facilities can only export raw rare earth concentrates without the capacity to separate individual elements or achieve the 95 percent purity standards required for advanced applications.

Vietnam Rare Earth JSC operates the country’s only light rare earth refining plant with an annual capacity of 5,000 tons and has plans to expand once production at the Dong Pao mine in Lai Chau comes online. But the lack of refining technology and downstream investment keeps Vietnam dependent on exports of low-value intermediates.

See also: Vietnam’s Rare Earth Mining Industry: An Overview

Barriers to processing and value addition

FIND BUSINESS SUPPORT

Seamlessly Manage Your Operations Across Multiple Asian Markets

Technology constraints: Vietnam’s domestic technology supports only 40 percent of the necessary processing steps for producing high-purity rare earth oxides. The absence of advanced separation technologies restricts its ability to capture greater value from its mineral resources.

Capital requirements: Downstream processing is highly capital-intensive and requires complex refining systems and long payback periods. Therefore, smaller private firms and foreign participants are hesitant to bring skin in the game, as investors often seek established infrastructure or co-investment guarantees.

Energy infrastructure: Smelting and refining require large, stable energy supplies, yet Vietnam’s power grid capacity remains constrained.  Vietnam’s industrial electricity prices averaged VND 2,204.07 per kWh (US$0.084) in 2025, due to which energy costs can take up 25-35 percent of total expenses for aluminum and tungsten production.

Technical expertise: There is a shortage of skilled labor and technical expertise in chemical metallurgy and refining. Vietnam remains reliant on foreign technology partnerships with China, Japan, and South Korea, but these relationships are still limited in scope.

Infrastructure bottlenecks

Transportation costs: Transport expenses account for more than 60 percent of total logistics costs, nearly double the regional average. Each aluminum plant makes around 23,000 annual trips between production sites and Go Dau Port in Dong Nai Province, which becomes an overhead to export operations.

Road infrastructure: Most mining areas depend on narrow mountain roads passing through residential zones, which leads to congestion and safety issues. Vietnam already has 2,000 km of expressways, and the government is prioritizing infrastructure expansion, with over 1,800 km of the North-South Expressway set to become operational by 2025.

Port capacity: Cai Mep-Thi Vai is undergoing expansion to handle larger vessels and increased throughput. Nevertheless, the existing ports like Cat Lai (Ho Chi Minh City) and Dinh Vu (Hai Phong) are still under pressure to handle large traffic.

Rail connectivity: Vietnam plans to modernize freight transport through the US$8.7 billion Lao Cai-Hanoi-Hai Phong railway project, which will connect mining zones to industrial and export hubs. The corridor will support heavy freight movement and reduce pressure on road transport once operational.

Supply chain dependencies

Vietnam’s industrial supply chain remains heavily reliant on imports of machinery, raw materials, and chemical inputs. More than 70 percent of industrial machinery and equipment used in mining operations is imported from China, Japan, and South Korea, which inflates operating costs for smaller firms and limits local manufacturing capabilities.

The manufacturing sector is also dependent on Chinese raw materials and intermediate goods, leading to longer production lead times and higher logistics costs. It is exposed to supply chain disruptions, as seen during the Covid-19 pandemic or China’s export restrictions on REE in 2025. Its mining and refining processes also rely on imported reagents and specialized chemicals, and further increase its exposure to foreign supply fluctuations and currency risks.

Investment incentives and financing

FIND BUSINESS SUPPORT

Have a question about tax liability in Vietnam? Contact our Tax Team

Projects located in Special Economic Zones (SEZs) or extremely disadvantaged regions can access a 10 percent tax rate for 15 years, coupled with a four-year tax holiday and a 50 percent reduction for the next nine years. Mining projects in other disadvantaged zones receive a 17 percent rate for 10 years and shorter tax holidays.

High-tech and mineral processing ventures, especially those linked to battery materials and advanced refining, enjoy a 10 percent corporate tax rate for up to 15 years. The extraction of rare minerals (silver, gold, gemstones, platinum, tin, wolfram) faces higher taxation (40-50 percent).

Investment projects may also receive import duty relief on capital equipment, raw materials, and specialized machinery used in exploration and processing during their early-stage development.

See also: Vietnam’s Natural Resource Tax 2024

Takeaway

Vietnam’s critical minerals sector is no longer struggling with fragmented and export-oriented mining. It has developed into a policy-driven industry with national and global importance.

Yet, there are lingering challenges in licensing and environmental approvals. The government’s ongoing efforts to ease environmental clearances, simplify regulations, improve infrastructure, and incentivize domestic processing will determine how effectively Vietnam can move up the value chain.

See also: Apple Suppliers in Vietnam: Where They Are and Why

(US$1 = VND 26,359.9)

• Previous Article Vietnam’s Evolving Tax Regime: Compliance with New CIT, VAT, and Invoicing Rules
• Next Article 2025年越南中产阶级洞察：规模、消费习惯及商业机遇