Six people, including the previous Deputy Environment Minister, were jailed for infractions in Vietnam’s booming rare earth mining business. Luu Anh Tuan, the head of Vietnam Rare Earth JSC (VTRE), a key player in Vietnam’s rare earth industry challenge to China, is reportedly imprisoned, but not confirmed.
The arrests were part of a tax fraud and illicit mining probe. In transactions with Thai Duong Group, a Yen Bai mine operator, Tuan is accused of falsifying value-added tax receipts. The mine sent raw ores to China, circumventing domestic refining processes due to higher prices, which is prohibited by Vietnamese law to improve local capacity.
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Thai Duong Group’s 13,715 tons of rare earth ores were seized recently as illicit mining prosecutions increased. Thai Duong Group chairman Doan Van Huan was detained for allegedly earning $25.8 million from illegal activities.
Vietnam plans to increase rare earth output from 4,300 tons in 2022 to 60,000 tons by the decade’s end. After China, the country has the second-largest rare earth reserves, making it a major role. President Joe Biden’s visit to Hanoi last month highlighted the US’s strategic efforts to diversify its supply chains away from China.
The arrests have cast doubt on Vietnam’s rare earth agreements and investments. To compete on new mining concessions, VTRE worked with Australian businesses like ASM and Blackstone Minerals. After the detentions, these relationships are under inspection, affecting the stock values of the involved corporations.
Despite potential hurdles to its ambitious growth goals, Vietnam’s campaign shows its commitment to regulating the industry and reducing unlawful practices before it auctions new mining licenses later this year..
