Vietnam is located in Southeast Asia. The country is well endowed with a variety of minerals, including some that have not been developed. The primary Vietnam natural resources include coal, bauxite, timber, offshore oil, and precious metals such as gold and copper, among others. High amounts of natural minerals available, has resulted in a high level of mining and quarrying activities that take place. For instance, mining and quarrying accounted for almost a tenth of the country’s economy in 2003, engaging nearly 1% of the total workforce. Vietnam mainly exports petroleum and coal; however, other minerals such as bauxite, iron, gold, and zinc, among others, are also mined. The country has embarked on exploiting oil and other minerals through state-owned organizations. Here are some of the Vietnam natural resources:
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Coal
Coal is the second most crucial mineral fuel produced in Vietnam. It is the primary fuel used in thermal power plants and manufacturing, as well as a cooking fuel for urban and rural populations. Coal is also a valuable export commodity. Vietnamese anthracite coal accounts for about a third of total anthracite coal traded in the world. Japan and Western Europe are the leading importers of Vietnamese coal, which has high heat content and low ash, nitrogen, phosphorus, and sulfur content, thus meeting strict environmental protection rules in these countries. Between 2002 and 2005, coal output doubled from 16 Mts to 32 Mts, and demand is expected to grow strongly for both internal use and exports. It is estimated that Vietnam would start importing coal as early as 2015.
As with oil and natural gas, price and cost data used in the estimation of coal wealth are obtained from the World Bank. Production volumes are from national statistics. The baseline estimated value of coal is US$115 per capita. Consequently, other mineral fuels have recorded a significant increase in prices over the last five years, and between 2001 and 2005, the coal prices doubled, on average. Thus, given robust demand and likely price scenarios, we also consider a high price high production volume scenario for coal, which takes 2005 prices and values as the basis of future rents. In this high price and volume scenario, coal wealth triples in value to US$305 per capita.
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Bauxite
Just like coal, Vietnam is ranked third when it comes to the largest bauxite reserves. The largest reserves are found within the Tay Nguyen Central highlands. This resource is primarily used in the production of aluminum. According to the Vietnamese government, there is an estimated 5.4 billion tons of bauxite reserves. However, despite the tremendous amounts of the resource, the country’s annual production is expected to stand at 30,000 tons. In 2007, the government bauxite mining plan was to start a further six projects in Dak Nong and Lam Dong areas. These projects would produce 600,000 tons annually, with the plan costing the country close to 16 billion dollars.
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Oil
Oil production is expansive within Southeast Asia; however, Vietnam is among the top three leading producers of oil in the region. The government solely controls oil production in the country with state-owned PetroVietnam being a monopoly. Oil is a significant contributor to the country’s gross domestic product (GDP) as well as its annual budget with 20% and 25%, respectively. Over the years, there has been an increase in the production of oil. For instance, the total output in 2016 was 7.3% more compared to 2015.
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Natural Gas
Since the production of natural gas began in Vietnam, the activity proliferated in the early 2000s. Moreover, between 2000 and 2005, gas production incredibly quadrupled. Being among the vital Vietnam natural resources, the gas produced is widely used in industrial consumptions. However, the largest fraction of the gas produced is utilized for domestic purposes, especially the fuelling of electric power plants.
Conservative estimates put proven natural gas reserves at around 190 billion cubic meters. On the other hand, oil would require a supplementary exploration and discoveries as it could significantly increase proven reserves. If so, natural gas would play an essential role in Vietnam’s development, meeting its growing energy needs. The value of natural gas wealth in Vietnam is estimated by using the price and cost data, which can be accessed at the World Bank. The price data is based on several sources, such as the Global Commodity Markets and the Statistical Review of World Energy. , the country managed to produce a staggering 376.81 billion cubic feet of natural gas, which helped the country to raise $22 billion in revenue.
The production of oil and gas has seen the country become a significant importer of technology and equipment. Usually, Vietnam’s natural resources are controlled by the government; however, this trend has recently changed as oil and gas being opened to foreign firms.
Tax Increases
In recent years, the Ministry of Finance in Vietnam looked for endorsement to increase taxes on the country’s primary natural resources. A portion of the items to get the tax raise range from iron from 12% to 15%, gold from 15% to 20%, and bronze from 13% to 18%. Other natural resources that were influenced include coal, sand, and valuable stones, for example, rubies and precious stones. The new tax increase could discourage outside direct speculation, which had just diminished by 19.4% in 2017. South Korea had the most significant new interest in Vietnam at US$1.1 billion.
