Japan-owned firm begins rare earth exploitation

The Japanese-wholly invested Vietnam Rare Elements Chemical JSC with total capital of $49 million, will work over four hectares in the southern province of Ba Ria Vung Tau.

The project will specialise in processing zircon ore to produce metasilicate and zirconium compounds. During the first phase, the plant is expected to have the capacity of 13,300 tonnes of zirconium oxychloride and 8,500 tonnes of sodium metasilicate a year.

Zircon is used for production of refractory products, cell phones, televisions, spacecraft and racing car brakes. It is also material for the nuclear power industry.

The zircon plant will enjoy preferential tax policies with an income tax rate of 20 per cent for the first ten years of operation.

According to the Ministry of Natural Resources and Environment (MoNRE), Japan’s government and enterprises have been accelerating their search for new suppliers of rare earths around the world, including Vietnam. Japan’s annual demand for the material is over 30,000 tonnes and it currently depends on China for about 90 per cent of its supply.

Japan’s Dong Pao Rare Earth Development Company, including Sojitz and Toyota Tsusho Corp, and Vietnam’s Lai Chau-Vimico Rare Earth Joint Stock Company, are also implementing a rare earth mining and processing project in northern Lai Chau province’s Tam Duong district, following a memorandum of understanding (MoU) inked two years ago.

Under the MoU, the project will first annually exploit 10,000 tonnes of rare earth and then negotiate the establishment of a Vietnam-Japan joint venture with charter capital of at least 30 per cent of the project’s total investment value.

The MoNRE said that Vietnam ranked fifth globally in rare earth reserves, which are largely concentrated in Lai Chau and Yen Bai, making it an attractive destination for countries, including South Korea and Japan, seeking to ease their reliance on China in this field.

Vietnam has estimated reserves of 21 million tonnes of the already surveyed 99 million tonnes of rare earths found internationally. The country has, however, not effectively tapped the resources due to backward technology.

Environmental impacts and radioactive leaks are among the country’s major concerns.

Australian media reported early last year that Asia’s fourth-largest economy South Korea would develop rare earths in Vietnam, Australia, Kyrgyzstan and South Africa in 2014.