In Vietnam, there are more than 5000 mines with about 60 different types of minerals. Bauxite and ilmenite are the minerals believed to have relatively large reserves by world standards (Research Institute of Geology and Minerals 1999).
However, the world reserves of bauxite and ilmenite are also huge. Therefore, these are not rare and high-value minerals. There is not great potential for fossil minerals including oil and coal. Vietnam’s oil and anthracite reserves are estimated at 4.3 billion tons and 18.43 billion tons, respectively. With current production rate, oil and coal resources in Vietnam will be exhausted in about 56 to 165 years, according to experts in this field. Reserves of other minerals including iron, manganese zinc, and lead of Vietnam is quite small and scatteredly distributed.
In recent years, the mining and mineral processing industry has played an important role in the industrialization and modernization process of Vietnam. On average, each year the mining industry provides over 100 million tons of limestone cement, over 70 million m3 of common building materials, nearly 100 million m3 of construction sand and leveling sand, over 40 million tons of clean coal, and over 3 million tons of iron ore which basically meet the needs of mineral materials for other industries.
According to the General Statistics Office, by the end of 2018, the mining industry was worth 408.2 trillion VND, up 9.17% in value compared to 2017, contributing 7.38% to the gross domestic product at current price. In the first 10 months of 2019, the mining industry's industrial production index increased by 1.2% over the same period of 2018.
However, there have been several problems in mining activities in Vietnam which have been affecting many socio-economic aspects. Mining is one of the causes of serious environmental problems, including erosion, landslides, loss of biodiversity, pollution of soil, groundwater and surface water due to chemicals used in ore processing. Massive mining activities and lack of planning are also the direct causes contributing to the depletion of Vietnam's mineral resources.
At the same time, the number of enterprises involved in the mining sector has increased rapidly. The number of enterprises engaged in mining in 2007 was 1692, an increase of 4 times compared to 2000 (423 enterprises) (GSO 2008). The 2005 Mineral Law was revised, decentralizing the licensing of small-scale mines, which are not in the Government's planning, to the People's Committees of provinces and cities. With these changes, the number of licenses issued also spiked.
Statistics shows that from 1996 to 2008, the Ministry of Industry and the Ministry of Natural Resources and Environment issued 928 licenses for mineral activities. Meanwhile, within just 3 years, from October 2005 to August 2008, People's Committees of provinces and cities issued 3,495 mining licenses (National Assembly Standing Committee 2012). Leaders of MONRE also reflected on localities granting mining licenses without regard to the Government's planning. This shows the unreasonableness and laxity of the law in the field of mining.
Vietnam is a country with a relatively high percentage of mineral exports. Excluding oil and natural gas, the size of the solid minerals sector in the mining industry relative to the national economy as a whole would put Vietnam on a par with Ghana, where gold mining accouns for 6% of GDP, export revenue for 45% and tax revenue for 12% (World Bank 2011).
Miners around the world are raking in billions of dollars after the commodity price boom sparked a massive post-pandemic recovery. The global economy's strong recovery from the deep recession caused by the COVID-19 pandemic last year fueled a boom in commodity prices.
Meanwhile, the negative impact of the Covid-19 pandemic on the mining industry in Vietnam is still very heavy. In the first 7 months of 2021, IIP of the mining industry decreased by 6.3%, of which crude oil and natural extraction decreased by 10.4%.
Some provinces including Thai Nguyen, Quang Ninh, Lam Dong reported negative growth in this industry the first 6 months of 2021. In general, Vietnam's mining industry is experiencing a negative growth rate and may face a gloomy future.
Compiled by VietnamCredit