When Japanese Prime Minister Takaichi Sanae arrived in Hanoi on May 1, he was driven from Noi Bai Airport in a VinFast Lac Hong 900 LX. The car’s name evokes a mythical bird from Vietnamese tradition, while its design is inspired by the bronze drum of Dong Son and bamboo groves, blending modern industry and cultural heritage.
Over the next three days, Takaichi and Vietnamese Prime Minister Le Minh Hung signed six cooperation documentslaunched the first project under Japanese POWERR Asia Initiativeand identified “economic security, including energy, critical minerals, semiconductors, AI and space, as new priority areas” in bilateral relations. THE joint statement committed both parties to strengthening supply chains, particularly for rare earths, in Vietnam.
Viewed through the prism of Takaichi’s visit, Vietnam’s critical minerals strategy appears to be an effort to enforce the country’s minerals doctrine. strategic autonomy to the sector at the heart of global competition. Strategic autonomy was reaffirmed as essential to long-term development at the January 2026 Vietnam Communist Party congress.
Domestic architecture
Vietnam mining governance is experiencing significant changes. On January 1, 2026, the amended Geology and Minerals Law came into effect, classifying rare earths as special strategic minerals, prohibiting the export of unprocessed rare earth ores, and limiting exploration, mining, and processing rights to enterprises designated or approved by the state. A separate national strategy on rare earths should be submitted to the competent authorities in early 2026.
By deciding who mines, what comes out, and on what terms, Hanoi transforms minerals into state-run strategic assets. This change allows Vietnam to seek processing partnerships instead of just exporting raw ore.
The legal changes are partly a response to illegal rare earth mining and smuggling networks. Between October 2023 and July 2024, the Ministry of Public Security arrested 14 people linked to the illegal exploitation of the Yen Phu mine, in Yen Bai province, including the presidents of two large companies. The investigation extended These will include a former deputy minister of natural resources and environment, the former head of the General Department of Geology and Minerals, as well as senior provincial officials. The defendants were accused of extracting and selling more than 291,000 tonnes rare earths and iron ore, some of which was smuggled into China using falsified customs documents. The crackdown has made it clear that rare earths are now being treated as a matter of national security.
The critical minerals boom is part of a broader restructuring of Vietnam’s energy and resources strategy. THE Eighth Revised National Electricity Development Planapproved in 2025, increases renewable and nuclear capacity to meet the electricity demand of a highly industrialized economy, with Russian And South Korean cooperation is now at the heart of the two planned nuclear sites.
Together, these measures demonstrate Hanoi’s intention to integrate minerals and energy into a broader framework of strategic autonomy to ensure that resource governance, energy security, and industrial policy are aligned under state leadership.
When strategic autonomy meets great power rivalry
Competition for critical minerals has tightened significantly since 2023. China processes between 85% and 100% of global rare earth refining and dominates the downstream segments of the battery and electric vehicle (EV) value chains. In a 2020 essayXi Jinping wrote that China should “strengthen the dependence of international production chains on China” to avoid supply disruptions due to external actors.
This logic became concrete in April 2025when Beijing imposed export licenses for seven heavy rare earth elements, forcing U.S. and European automakers to cut production or close factories due to shortages of permanent magnets. Subsequent measures in October 2025 extended the same logic. A national supply chain framework April 2026 integrated minerals into China’s broader approach to supply chain control.
The United States, on the other hand, has mining potential but virtually no domestic potential. refining capacityand cannot match China’s scale in the short term. Moreover, it is ammunition stocks depend on heavy rare earths. Washington responded by forming a coalition. Since February 2026, the United States has brought together 55 partner countries at the summit Ministerial meeting on critical mineralsspear Project vault as a strategic, coordinated stock the Forum on Geostrategic Resource Engagementand signed 13 new bilateral mining agreements. The goal is to integrate allied mining, refining and manufacturing into a non-Chinese supply chain.
Vietnam holds the world record sixth largest rare earth reserves and is a comprehensive strategic partner of the United States, but it was absent from the ministerial meeting on critical minerals. This absence reflects the underlying logic of strategic autonomy. Hanoi aims to maintain its decision-making independence and avoid binary alignment with major powers, while diversifying partnerships to protect sovereignty and economic security. In practice, this means engaging selectively with Washington and Beijing, while pursuing the long-term goal of building domestic (refining) capabilities through Japan, Russia, South Korea, and other partners able to provide capital and technology without political constraints.
The execution gap
Despite such ambition, three constraints currently limit the way in which the Vietnamese strategy can become operational. First, domestic capacity for processing high-purity rare earth oxides remains limited. Dong Paothe largest known reserve of rare earths in the country, has not yet been developed despite multiple foreign partnerships announced. Most of the ore mined in the country has always been exported to refine elsewhere. The combination of low deep processing capacity and continued export of raw ore leaves Vietnam with low value capture and high environmental risk.
Second, the economics of creating large-scale processing capacity are limited by input costs. Industrial electricity costs Averages 2,204 Vietnamese dong per kilowatt hour in 2025 and accounts for 25-35% of the total expenditure of adjacent heavy industries such as aluminum and tungsten production. Without a substantial reduction in industrial electricity costs or targeted subsidies, domestic processing of rare earths on a competitive scale is difficult to sustain.
Third, Vietnam’s flagship electric vehicle producer relies on the Chinese battery cell technology And chassis integration for its current and planned production. Rare earth export controls reduce China’s influence over Vietnamese ore, but not over the downstream components that support Vietnam’s industrial exports. Diversification is therefore partial when the most interesting applications are structurally linked to Chinese inputs.
Takaichi’s visit shows that Vietnam can attract partners willing to provide capital and technology without forcing alignment. How the model holds up will depend on the extent to which regulatory, industrial and infrastructure capabilities catch up with strategic intent. As demand for essential minerals rises and global supply chain orders fragment, other resource-holding middle powers will face the same test in the years to come.