Vietnam’s Mining Industry: Overview 2024

Vietnam’s mining industry is a vital sector of the country’s economy, contributing significantly to its GDP and export revenues. As of 2024, the industry is characterised by a diverse range of mineral resources, including coal, iron ore, bauxite, and various precious and industrial minerals. 

In recent years, Vietnam has sought to attract foreign investment in its mining sector to boost efficiency and technological advancement. Joint ventures and partnerships with international firms are increasingly common, allowing for the transfer of expertise and best practices. This strategy not only aims to bolster domestic production but also to position Vietnam as a competitive player in the global minerals market.

Looking ahead, the mining industry in Vietnam faces challenges such as fluctuating global commodity prices and environmental concerns. That said, as Vietnam continues to develop its mining capabilities, the sector is expected to play a crucial role in the country’s economic development while addressing sustainability and environmental impact.

Vietnam’s mining industry in numbers

Vietnam’s mining industry contributed US$10.28 billion to Vietnam’s GDP in 2023. This was a decline from US$11.37 billion in 2022, but still well up on 2020 in which mining contributed just US$7.84 billion.

Mining in Vietnam as a percent of GDP

Vietnam mine production

The Industrial Production Index (IPI) for Vietnam’s extractive sector rose by 1.72 percent in November compared to October, reflecting slight month-on-month growth, according to Vietnam’s General Statistics Office. This uptick signals some recovery in the sector’s performance during the short term.

Year-on-year, however, the extractive sector showed a significant decline of 9.85 percent in November 2024 compared to the same month in 2023. For the first 11 months of 2024, the IPI decreased by 7.31 percent compared to the same period the previous year, highlighting ongoing challenges faced by the industry.

 Vietnam industrial production extractive industries, November 2024

Source: Vietnam Industrial Production Index

Vietnam select resources mined, November 2024, Tons 000s

Source: General Office of Statistics

Vietnam mined exports

Source: Vietnam Exports Tracker

 Revenue, select Vietnam mining companies, US$ millions, quarterly

Revenue, select Vietnam mining companies, US$ millions, yearly

Foreign direct investment in Vietnam’s mining industry

In November, Vietnam’s mining sector registered no new projects and no newly registered capital, according to Vietnam’s Ministry of Planning and Investment. This compares to October, when the sector recorded 4 new projects and US$4,000 in newly registered capital, reflecting a 100 percent decline.

Year-to-date, the mining sector has attracted a total of 1 new project with US$2.8 million in newly registered capital, indicating limited investment activity for the year.

Vietnam’s mineral resources

Vietnam is home to a diverse range of mineral resources, making it an important player in the global mining landscape. These resources are distributed across the country and play a crucial role in both the domestic economy and international trade. Here’s a more detailed breakdown of Vietnam’s key mineral resources:

Coal

Vietnam’s coal reserves are primarily concentrated in the Quang Ninh province, which is known for its anthracite coal. This high-quality coal is crucial for domestic energy production, particularly for power generation, and is also exported to markets such as Japan and South Korea. The country’s coal production has been ramped up to meet growing energy demands, but there are also increasing concerns about balancing production with environmental sustainability.

Bauxite

Vietnam holds one of the largest bauxite reserves in the world, mainly located in the Central Highlands. Bauxite is the primary ore for aluminium production, and the country has been focusing on developing its aluminium industry to add value to its natural resources. The Tan Rai and Nhan Co projects are two key bauxite mining and alumina processing ventures that reflect Vietnam’s ambitions to become a significant player in the global aluminium market.

Rare Earth Elements (REEs)

Vietnam is increasingly recognized for its rare earth element reserves, which are crucial for the production of high-tech products such as electronics, electric vehicles, and renewable energy technologies. Vietnam’s rare earth deposits, primarily located in the northern provinces, are among the largest outside of China, positioning Vietnam as a potential alternative supplier in the global rare earth market. This has drawn the attention of foreign investors looking to diversify away from Chinese dominance in this sector.

Iron Ore

Vietnam has large reserves of iron ore, with the majority located in the northern regions, including the Thach Khe mine in Ha Tinh province, which is considered one of the largest iron ore deposits in Southeast Asia. Domestic steel production has been on the rise, using these resources to support infrastructure development and industrialization.

Gold

Gold deposits are found in several areas across the country, particularly in the central and northern provinces. While the gold mining industry in Vietnam is smaller compared to other mineral sectors, the value of gold in Vietnam is generally much more expensive than elsewhere in the world. As a result, local and foreign companies are engaged in gold exploration and extraction, focusing on deposits in regions such as Quang Nam province.

Tin, Zinc, and Lead

Vietnam is rich in base metals such as tin, zinc, and lead, which are vital for industrial uses. Tin is primarily mined in southern Vietnam, while zinc and lead are found in northern regions such as Cao Bang and Bac Kan. These metals are used in manufacturing, construction, and various other industries, both for domestic use and export.

Other Minerals

In addition to the above, Vietnam also has reserves of limestone, graphite, copper, and titanium, which are important for both domestic industries and international markets. Limestone, for instance, is essential for the cement industry, while graphite and titanium have applications in various high-tech industries.

Vietnam’s rich mineral resources have attracted significant foreign investment, with companies from Australia, Canada, China, and other countries partnering with local firms in joint ventures to extract and process these minerals.

Key players in Vietnam’s mining industry

These players collectively shape the dynamics of Vietnam’s mining sector, contributing to its growth and development.

Vietnam National Coal and Mineral Industries Group (Vinacomin)

As the largest state-owned enterprise in the mining sector, Vinacomin is responsible for coal production, mineral exploration, and mining services. It plays a crucial role in supplying coal for power generation and other industries.

PetroVietnam

While primarily known for its oil and gas operations, PetroVietnam also engages in mining activities, particularly in exploring and extracting mineral resources related to its energy sector.

Masan Resources

A prominent player in the mining of minerals such as tungsten and other rare earths, Masan Resources has gained attention for its commitment to sustainable practices and community development.

Bac Ninh Mineral Company

Specialising in the extraction and processing of minerals, this company plays a vital role in the regional mining landscape, particularly in the northern provinces.

Thang Long Mineral Company

Known for its investments in mineral exploration and processing, this company contributes to the supply of various industrial minerals in Vietnam.

Foreign investors

Numerous international mining companies operate in Vietnam, forming joint ventures and partnerships with local firms to explore and extract resources. This includes companies from Australia, Canada, and other countries, bringing in capital and expertise to the industry.

Investing in Vietnam’s mining industry

Investing in Vietnam’s mining industry presents both significant opportunities and challenges. The country is rich in a variety of minerals, including coal, bauxite, rare earths, iron ore, and gold. With Vietnam’s growing demand for industrial materials, coupled with its expanding energy needs, the mining sector is seen as a potential growth area. The Vietnamese government encourages foreign investment, particularly in areas that promote sustainable and high-tech mining practices.

Foreign investors typically enter the market through joint ventures or partnerships with local companies, allowing them to navigate regulatory frameworks and access domestic resources. The government has worked to make the investment process more attractive by simplifying the licensing system and providing tax incentives for projects that focus on modernization, environmental sustainability, and local development. Several international firms from Australia, Canada, and China are already active in Vietnam, leveraging their advanced technology to improve efficiency and productivity.

However, investing in the sector is not without its challenges. The industry is subject to strict regulations to ensure environmental protection and resource conservation. Foreign ownership limits, particularly for strategic minerals, can restrict full control by foreign investors. Additionally, fluctuating global commodity prices and complex licensing procedures can pose risks to long-term investments. Nonetheless, for investors with the right expertise and willingness to engage in sustainable practices, Vietnam’s mining industry offers strong growth potential.

Of note just 106 FDI projects in mining have been announced in Vietnam since 1988 worth just US$4.9 billion. As a point of reference, Vietnam’s manufacturing industry has seen about 17,458 FDI projects worth about US$296 billion.

Vietnam’s Natural Resources Tax

Vietnam’s Natural Resources Tax was adopted by the National Assembly on November 25, 2009, and came into effect on July 1, 2010. It adds to a growing list of taxes in Vietnam.

This law is further detailed through various implementing decrees and circulars issued by the government and the Ministry of Finance, such as Decree No. 50/2010/ND-CP and Circular No. 105/2010/TT-BTC.

These documents provide guidelines on tax rates, calculation methods, declaration procedures, and exemptions, ensuring comprehensive regulation of natural resource exploitation in Vietnam. This article summarises these key components of the law.

For more information see: Vietnam’s Natural Resources Tax

What’s next?

Vietnam’s mining industry is a key sector, rich in resources such as coal, bauxite, and rare earths, contributing significantly to the economy. The government encourages foreign investment through joint ventures, focusing on modernising the sector while enforcing strict regulations to promote sustainability and environmental protection. Despite opportunities, challenges include foreign ownership limits on strategic minerals and fluctuating global commodity prices.

With this in mind, to keep abreast of what’s happening in Vietnam’s mining industry, foreign mining industry professionals should make sure to subscribe to the-shiv.