Vietnam’s extractive industry output contracted by 32.9 percent in January compared to the 2019 baseline, according to Vietnam’s Industrial Production Index. The sector also saw a 28.4 percent decline from 2019 levels in December, indicating a continued downward trend.
Month-on-month, the sector fell by 9.1 percent in January compared to December, while year-on-year, output dropped by 10.4 percent from January 2024.
Vietnam’s extractive industry plays an important role in the country’s economy, encompassing the extraction of natural resources such as coal, oil, natural gas, minerals, and timber. The sector contributes to energy production, industrial raw materials, and export revenues, particularly coal and petroleum. The government has worked to modernise the extractive industry, focusing on sustainable development, improving technological capacity, and ensuring environmental standards are met.
The coal industry is a significant part of the extractive sector, with Vietnam being one of the largest coal producers in Southeast Asia. The country produces both hard coal and lignite, which are primarily used for electricity generation and in industries such as cement production. The mining of coal is concentrated in the northern regions, particularly in Quang Ninh province, and the country is also a major exporter of coal, especially to markets like China and Japan.
The oil and gas sector is another key component of Vietnam’s extractive industry. Vietnam is a significant producer of crude oil, and offshore oil fields in the South China Sea play a central role in the country’s production. State-owned companies like PetroVietnam dominate the sector, overseeing exploration, extraction, and distribution. However, oil production has been in gradual decline due to the depletion of key oil fields, and the country is seeking to attract more foreign investment to explore new reserves and develop new technologies.
In addition to fossil fuels, Vietnam has significant mineral resources, including bauxite, titanium, and precious metals. The mining of bauxite has attracted attention due to the potential to develop an aluminium industry, though environmental concerns and the challenges of processing the mineral have slowed the sector’s development. Other minerals such as tin, copper, and zinc are also extracted in various regions of the country.
Despite the importance of the extractive sector, Vietnam faces several challenges, including environmental degradation, over-reliance on non-renewable resources, and the need to improve governance and reduce illegal activities in the sector.
See also: Mining in Vietnam: Industry Overview