Australian Prime Minister Anthony Albanese announced that the country is elevating its relationship with Vietnam to the status of a comprehensive strategic partnership. This includes instituting an annual dialogue on minerals, reflecting efforts 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 advancement in ties signifies the recent achievement of Communist-led Vietnam's 'bamboo diplomacy,' following its strengthening of relations with major global powers last year amid escalating global tensions. "Mutual political trust between the two countries has been elevated, reaching the highest-ever level," the official Vietnam News Agency reported. According to a joint statement by both nations, the partnership will bolster collaboration across various domains such as climate, environment, energy, defense, security, economic engagement, and education. Albanese and Chinh also observed the exchange of 12 cooperation documents covering areas such as energy, minerals, agriculture, banking, and finance, as reported by the Vietnamese government.
Australia is a significant producer of essential minerals crucial for various industries, ranging from smartphones to automobiles. Conversely, Vietnam possesses some of the largest undeveloped deposits globally. "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 committed to enhancing collaboration with Vietnam on rare earths, recognizing Vietnam's resources as a potential alternative mineral source. China, possessing the world's largest deposits estimated at 44 million tons, currently controls the extraction and processing of these crucial minerals.
Vietnam, reportedly possessing the world's second-largest deposits of approximately 22 million tons of rare earth oxide (REO) equivalent, has drawn interest from Australian miners. Blackstone Minerals Ltd. has reached an agreement to collaborate with Vietnam Rare Earth JSC (VTRE) to secure concessions at Vietnam's largest mine, Dong Pao, in Lai Chau province. The project, if successful in obtaining the concession, is estimated to be worth around $100 million.
In April 2023, Australian Strategic Materials (ASM) initiated an agreement with VTRE for the purchase of 100 tons of processed rare earths annually, with further discussions committed to establishing a longer-term supply arrangement. Australia, a significant coal exporter, has historically supplied coal to Vietnam, which heavily relies on fossil fuels for electricity generation. Coal exports from Australia to Vietnam surged by 17% last year, reaching 20 million metric tons, representing 39% of Vietnam's total coal imports. Additionally, Vietnam's top partners now encompass a diverse range of countries, including the United States, China, India, South Korea, Japan, and Russia.