FIEs to further explore metal mining, photo VNA

The draft Law on Geology and Minerals, which is set to replace the existing Law on Minerals 2010 (LoM), is scheduled to be submitted to the National Assembly for first comments at its seventh plenary session in May.

Before the amended law is submitted, the Mining Working Group (MWG) of the Vietnam Business Forum is contributing to discussions on reviewing and revising the LoM so that clean and environmentally sustainable mining can be a significant part of Vietnam’s economic growth.

Vietnam is rich in mineral resources, particularly in critical metals such as rare earths, nickel, copper, cobalt, and tungsten. These are all needed by the country’s renewable power and energy industry to help meet Vietnam’s pledges on the reduction of CO2 emissions, and the fast-growing semiconductor chip and digitalisation industries, which Vietnam aspires to be a leader in.

Vietnam’s General Statistics Office reported that in recent years, four Vietnamese-produced commodities that exceeded $10 billion in export value were mainly metallic: mobile phones and spare parts; electronics, computers, and components; machinery, equipment, and spare parts; and vehicles and spare parts.

A MWG report shows that despite such big potential, only a fraction of Vietnam’s valuable metal assets have been discovered to date because of the lack of systematical exploration using modern technologies and methods, such as airborne geophysics and deep penetration technologies to locate more deeply buried deposits.

In addition, illegal mining and local companies using outdated, wasteful, unsafe, and environmentally damaging methods dominate Vietnam’s mining scene.

In view of this, the group said the best way to eliminate environmental damage, apart from enforcing existing regulations, is to encourage foreign-invested enterprises that follow internationally accepted best practices of responsible, sustainable, and efficient mining, environmental protection, and worker safety.

“Currently, working group participants are relatively junior companies but using the world’s best technologies. They are determined to persist and achieve good results in Vietnam as the metals currently being sought or mined by the MWG participants are all essential in the production of electric vehicles and their batteries, wind turbines, solar panels, and digital transformation,” said Bill Howell, chairman of the MWG.

“Having these metals sourced and available in Vietnam, instead of importing them, provides the country with the opportunity to develop downstream high-tech manufacturing industries and establish Vietnam as a dominant regional or even world hub for the manufacture of these products, now highly sought after for a carbon-neutral future,” Howell added. “This is in line with Vietnam’s emphasis on capacity building of manufacturing and supporting industries, and partnership with domestic enterprises where possible.”

MWG members are currently stifled by the apparent lack of coordination and communication among the various Vietnamese ministries and departments involved in exploration and mining, Howell said. It is hoped that bodies like the proposed National Council for Science, Technology, and Innovation and its stated coordination role may help in this regard.

Foreign-invested mining groups have also stated that shortcomings in the LoM itself, as well as excessively high royalties, taxes, and fees compared to other countries, are also significant deterrents to developing an efficient mining industry in Vietnam.

“To draw in quality direct foreign investment in mining, MWG members request the government to benchmark Vietnam’s fiscal regime against peer countries and to provide a fiscal regime competitive with those offered by other jurisdictions. In addition, it is necessary to simplify the current fiscal regime for ease of explanation to investors,” Howell said.

The group hoped that the government and relevant authorities will provide fiscal stability and reduce the frequency of policy changes due to the long lead-time of mining projects, and simultaneously continue improving internal standards and consider recognising and adopting international mineral resource standards, he added.