Australia and Vietnam upgrade relations, to begin talks on critical minerals (updated)

Blackstone Minerals

07/03/2024 24:56

(Adds comment in par 4, cooperation documents signing in par 6,
and rare earth, coal cooperation in par 10-14)
    By Alasdair Pal
       SYDNEY, March 7 (Reuters) - Australian Prime Minister
Anthony Albanese said on Thursday the country was raising ties
with Vietnam to the level of a comprehensive
strategic partnership, with an annual dialogue on minerals amid
a push to diversify supply chains away from China. 
    "Elevating our ties to a comprehensive strategic partnership
today places Australia and Vietnam among each other's
significant partners," Albanese told a news conference in
Canberra.
    The ties upgrade marks the latest success for
Communist-ruled Vietnam's "bamboo diplomacy", after it boosted
relations last year with the world's top powers as it tries to
navigate rising global tensions.
        "Mutual political trust between the two countries has
been elevated, reaching the highest-ever level," the official
Vietnam News Agency reported on Thursday.
  
    The partnership will support expanded cooperation on a range
of issues, including climate, environment and energy, defence
and security, and economic engagement and education, a joint
statement by the two countries said.
    Albanese and Chinh on Thursday also witnessed the exchanges
of 12 cooperation documents on areas including energy, minerals,
agriculture, banking and finance, according to the Vietnamese
government. 
    Australia is a major producer of critical minerals that are
used in everything from smartphones to automobiles, while
Vietnam has some of the largest untapped deposits in the world. 
    "An annual ministerial dialogue on energy and minerals will
drive cooperation in our energy and resources sectors, including
critical minerals supply chains," the statement said. 
    The United States has already agreed to boost cooperation on
rare earths with Vietnam, whose resources are seen as an
alternative source of the minerals. China has the world's
largest deposits, with 44 million tons estimated, and dominates
the extraction and processing of the critical minerals. 
    Vietnam, which is said to have the world's second-largest
deposits of around 22 million tons of rare earths oxide (REO)
equivalent, has attracted miners from Australia. 
        Blackstone Minerals Ltd.  BSX.AX  had agreed to partner
with Vietnam Rare Earth JSC (VTRE) to win concessions at the
Vietnam's biggest mine, Dong Pao in Lai Chau province, in a
project that would amount to about $100 million if it wins the
concession.
  
        Australian Strategic Materials  ASM.AX  also signed a
binding agreement in April 2023 with VTRE for the purchase of
100 tons of processed rare earths a year, and committed to
negotiating a longer-term supply deal.
  
        However, some rare earth deals have been left in limbo
after Vietnamese police in October 
    arrested
     the VTRE chairman and accused him of forging value added
tax receipts and rare earth smuggling. 
  
        Australia has been a key coal supplier to Vietnam, which
is heavily reliant on the fossil fuels for power generation.
Coal shipments from Australia to Vietnam rose 17% last year to
20 million metric tons, accounting for 39% of Vietnam's total
coal imports.
  
    Along with Australia, the Southeast Asian nation's top
partners now include the United States, China, India, South
Korea, Japan and Russia.

 (Reporting by Alasdair Pal in Sydney and Khanh Vu in Hanoi;
Editing by Christian Schmollinger, Michael Perry and Gerry
Doyle)
 ((Alasdair.Pal@thomsonreuters.com; +61 291 717 228; Reuters
Messaging: alasdair.pal.reuters.com@reuters.net))