Research Paper: Critical Minerals and Implications for Vietnam

 

Critical minerals are one of the concerning issues in international relations at the present. Concerns about critical minerals stem from many factors. Firstly, the demand for critical minerals in the world is increasing rapidly, especially in the context of many countries pushing the transition from traditional fossil fuel to clean energy. According to the International Energy Agency (IEA), in the energy sector alone, the global demand for critical minerals will double by 2023 and may even increase by 3.5 times in the net zero scenario by 2030. Secondly, after security and political incidents such as the Ukraine crisis or the COVID-19 pandemic, countries are in need of rearranging supply chains, including supply chains of minerals because now the mining is mainly concentrated in certain countries (for example, Congo accounts for 74% of the world's cobalt, China accounts for 70% of the world's rare earths). Third, major powers competition, especially between the US and China, is expanding into emerging technology, in which minerals are both a platform and a tool for competition. This trend can “politicize” the global mineral issue, especially in Asia, deepening the gap between supply and demand.

Vietnam is not outside of the above trends and their influence. Vietnam is among the world's leading countries in reserves of some critical minerals (such as wolfram, bauxite or rare earths) but there is still much untapped potential, including in the South China Sea (East Sea in Vietnam). Vietnam has also committed to net zero by 2050, so there is a need to promote green and clean technologies such as electronic chips, wind turbines, solar panels or electric vehicle engines. Besides, ensuring autonomy and strategic balance, including in security, economic and political aspects, is Vietnam's long-term interests, especially against the backdrop of competition increasingly deep and complex major power rivalry in the region.

For all the abovementioned factors, the South China Sea Institute conducted the report: “Critical Minerals and Implications for Vietnam”, with data collected through diverse sources (including interviews with experts from Vietnam, ASEAN and the US), analysis and comparison of policies of related countries. The report focuses on the following questions: (i) What are critical minerals and what role do they play in the global supply chain? (ii) What are the policies of key players and current laws on minerals, including deep-sea mining? (iii) How is the US-China competition on critical minerals evolving and how are regional countries responding? (iv) What advantages or disadvantages does Vietnam have in the face of these developments? From there, the report will make practical recommendations for Vietnam based on national interests and the current situation.