Australia and Vietnam are exploring ways to build a resilient partnership in rare earth elements, a group of critical minerals essential to modern technology and defence industries, as both nations seek to diversify supply chains and deepen economic ties.

Rising global demand for rare earths and China’s dominant position in the sector have intensified efforts by resource-rich countries to develop alternative sources and processing capabilities.

Vietnam holds some of the world’s largest rare earth reserves outside China and has been advancing policy to strengthen its domestic processing sector, including a ban on unprocessed ore exports effective from January 2026 that aims to encourage downstream development and strategic investment.

Australia, which has significant resources of rare earths and a government focus on critical minerals, sees cooperation with Vietnam as a way to combine strengths — Canberra’s advanced mining and regulatory expertise with Hanoi’s vast deposits and growing industrial base — in order to build supply chain capacity beyond extraction alone.

The longstanding relationship between Australia and Vietnam was elevated to a Comprehensive Strategic Partnership in 2024, and cooperation on rare earths has emerged as a priority within that broader framework.

Australian business engagement in Vietnam’s rare earth sector has included a three-way memorandum of understanding signed in 2023 between Vietnam Rare Earth Company (VTRE), Australian Strategic Materials (ASM) and Blackstone Minerals.

This agreement laid the groundwork for assessing mining sites, strengthening joint capabilities, and exploring long-term supply and processing opportunities that could underpin an integrated rare earth value chain.

Key challenges remain, including gaps in infrastructure, regulatory capacity and technology needed to move beyond raw extraction to high-purity refining and downstream processing.

Australia has also been advancing rare earth refining projects domestically and supporting research into sustainable mining technologies and environmental and social governance standards that would bolster cooperation.

Analysts say Vietnam’s emerging role could complement Australian and other partners’ efforts to reduce global reliance on any single supplier, enhancing competitive diversification in the Indo-Pacific rare earth market.

While substantial investment, phased capacity building and intergovernmental coordination will be required to realise this vision, the potential partnership reflects a strategically coherent approach to critical minerals security, economic resilience and regional engagement amid intensifying geopolitical competition over key technology supply chains.