The EU is Targeting Vietnam’s Tungsten to Cut Reliance on China

The European Union is seeking closer ties with Vietnam to secure supplies of tungsten, rare earths and other critical minerals, as China’s export restrictions and dominance of mineral processing expose vulnerabilities in Europe’s industrial and defence supply chains.

EU officials are considering financial support, technical assistance and export-credit insurance to help develop Vietnam’s mining and mineral-processing industries, according to internal EU documents reviewed by Reuters.

The proposals focus on tungsten, antimony, bismuth and titanium, while highlighting Vietnam’s substantial rare earth reserves as a potential source of supply for European manufacturers. The EU has also called for improved mapping of Vietnam’s mineral resources to assess their commercial potential.

“Considering Europe’s need to rearm and de-risk as fast as possible, the EU cannot afford ignoring Vietnam as a potential supplier of critical raw materials considering its abundant reserves in rare earth and tungsten in particular,” one document prepared by the EU delegation in Hanoi said.

The effort reflects a broader push by Brussels to diversify supplies of materials used in ammunition, advanced electronics, renewable energy, electric vehicles and other strategic industries, reducing exposure to disruptions from China, which dominates several critical mineral supply chains.

Vietnam offers a potential alternative, but turning its mineral resources into reliable European supplies will require investment in processing capacity, clearer regulation and long-term commercial agreements.

The EU’s push comes as Beijing’s export controls on critical minerals have disrupted supply chains and heightened concerns among European manufacturers over access to materials needed for defence production and advanced technology.

China supplies 100% of the EU’s heavy rare earth elements, according to the European Council. The bloc has set a target of sourcing no more than 65% of its annual consumption of any strategic raw material, at any relevant processing stage, from a single non-EU country by 2030.

Rare earths are a group of 17 elements used in permanent magnets, electric motors, wind turbines, electronics and defence systems. Their strategic importance stems not only from the availability of deposits but also from the difficulty of separating, refining and processing them at industrial scale.

EU imports of rare earth elements rose 17.1% to 15,100 tonnes in 2025, with China accounting for 46.8% of import volumes, followed by Russia at 25.9% and Malaysia at 23.1%, according to Eurostat.

The figures underline the challenge facing Brussels: diversifying supply requires alternative producers that can deliver processed materials at competitive prices, rather than simply countries with large mineral deposits.

The EU’s Critical Raw Materials Act sets 2030 benchmarks for domestic extraction, processing and recycling, while aiming to limit dependence on any single external supplier. The bloc is also pursuing partnerships with resource-rich countries to strengthen supply chains beyond its borders.

Vietnam’s mineral potential makes it an attractive partner, particularly for tungsten, a hard, heat-resistant metal used in cutting tools, industrial machinery, electronics and defence applications.

The U.S. Geological Survey estimated that Vietnam accounted for 4.1% of global tungsten production in 2024, making it the world’s second-largest producer after China. Vietnam held about 3% of global tungsten reserves, according to the agency.

Its position in rare earths is less developed. Vietnam accounted for just 0.079% of global rare earth production in 2024, despite holding an estimated 3.9% of global reserves, USGS data showed.

The gap between reserves and output highlights the scale of investment and technical development needed before Vietnam can become a major alternative supplier of rare earths to European industry.

Vietnam has also sought to retain more value from its mineral resources by developing domestic processing. In 2024, it decided against exporting raw rare earth elements, seeking to encourage domestic processing and the production of higher-value materials, according to USGS.

The EU documents warn that competition from investors outside Europe could undermine Brussels’ efforts to secure supplies from Vietnam.

One concern involves Masan High-Tech Materials, which operates the country’s largest tungsten operation at Nui Phao. An attempted acquisition of a majority stake in the business by foreign investors failed last year, according to the documents.

Masan sold a 4.99% stake to U.S. tungsten supplier Elmet Group in September and was reportedly discussing a further sale to another foreign investor, the documents said.

The developments illustrate how the global competition for critical minerals is increasingly extending to ownership of mines, refineries and processing facilities, rather than being limited to purchases of raw materials.

The EU documents also flag a proposed rare earth metals project involving Australia’s Lynas Rare Earths and South Korea’s LS Eco Energy that would use imported feedstock to produce rare earth metals in Vietnam.

Brussels is concerned that other international partners could establish stronger positions in Vietnam’s processing industry if European engagement comes too late, the documents said.

The EU is therefore considering a combination of loans, grants, technical assistance and export-credit insurance to encourage investment. Such support could help projects overcome financing and technical barriers, although it would not guarantee that output would be sold to European buyers.

Vietnam’s regulatory environment presents additional challenges for foreign investors, including uncertainty over permits, investment conditions and government requirements on technology transfer, according to the EU documents.

Mining projects also face lengthy development timelines, substantial capital requirements and environmental constraints. Rare earth processing can generate hazardous waste, while commercial viability depends on the mineral composition of deposits, recovery rates, processing costs and access to customers.

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