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China’s 2025 export controls exposed global rare earth supply chain vulnerabilities and accelerated US diversification efforts, with Australia as a key partner. Yet Australia’s ambitions of constructing a domestic rare earth value chain are constrained by environmental, social and governance (ESG) challenges. These limitations, alongside Australia’s ‘4R’ doctrine — region, relationships, resilience, rules — have underscored the need for deeper cooperation with like-minded Indo-Pacific partners to enhance supply security.

Vietnam is a promising partner for Australia in the rare earth sector. Ranked among the world’s top six countries by rare earth endowment, Hanoi has strengthened its policy and regulatory framework to prioritise the sector, support technological innovation and deepen international integration. Vietnam has also restricted exports of unprocessed rare earth ores, reflecting a strategic shift towards higher-value domestic processing. Amid rising regional volatility, Vietnam’s political stability and strong reform momentum since 2024 have strengthened its institutional capacity. These factors signal Vietnam’s commitment to attracting investment and facilitating technology transfer to build its rare earth value chain.

Deeper cooperation with Vietnam provides Australia with a practical pathway to advance its 4R foreign policy objectives while easing domestic constraints. Vietnam’s rare earth resources are largely ion-adsorption deposits, which have lower levels of radioactivity than the hard-rock deposits common in Australia. By relocating parts of light rare earth mining and refining to Vietnam, Australia can reduce environmental and cost pressures while retaining clean-energy manufacturing at home. This division of labour would diversify supply and strengthen economic resilience.

Beyond its economic benefits, the arrangement carries strategic implications. Shifting light rare earth refining offshore would allow Australia to focus on developing heavy rare earth capacity at home to help meet defence-related demandfrom the United States, strengthening its role as a key supplier to its biggest ally. Closer cooperation with Vietnam would also enhance Australia’s middle-power diplomacy, broaden cooperative networks and increase its strategic autonomy amid intensifying great power competition.

As regionalisation increasingly replaces globalisation, deeper engagement with Vietnam supports Australia’s ‘region’objective by helping shape a middle-power rare earth supply chain anchored in the Indo-Pacific. Closer partnership with Vietnam would also strengthen Australia’s engagement with ASEAN, where Vietnam plays a growing industrial and diplomatic role, consistent with ASEAN centrality.

Under the ‘rules’ pillar, integrating Vietnam into higher-value segments of the rare earth supply chain can strengthen rules-based governance through greater transparency, stronger ESG standards and closer regulatory coordination. Cooperation through forums such as the G20 Critical Minerals Initiative and through floor price mechanisms could help reduce market distortions, limit dependence on dominant actors and enhance the resilience and predictability of Australia’s critical mineral supply chains.

Yet significant challenges remain. Efforts to ease environmental and economic pressures by relocating rare earth processing to Vietnam may be constrained by Vietnam’s limited governance capacity and sectoral resources. Investigations into corruption and smuggling involving Vietnamese rare earth firms, alongside underdeveloped infrastructure and logistics, could deter Australian investment and weaken technology transfer. Canberra’s ambition to promote rules-based governance through its bilateral cooperation may also take time to realise, as Vietnam’s regulatory framework is still consolidating.

Regionally, both countries operate under great power pressure. Vietnam maintains close economic and security cooperation with China. While China is by far Australia’s largest trading partner, Australia prioritises its alliance with the United States. Bilateral cooperation must proceed cautiously amid Beijing–Washington competition. While the partnership could deepen Australia’s engagement in Southeast Asia, ASEAN’s internal divergences and current preference for bilateral arrangements may limit broader regional coordination.

Australia–Vietnam cooperation in rare earths has significant potential if pursued through timely, practical measures. The long-standing and robust Australia–Vietnam relationship was elevated in 2024 to a Comprehensive Strategic Partnership. In 2021, Australia became the first partner to establish a high-level dialogue mechanism on energy and minerals with Hanoi. As this dialogue is set to convene in 2026, early intergovernmental arrangements should prioritise translating political alignment into substantive cooperation. Australia can also support Vietnam in strengthening ESG frameworks for rare earths, helping mitigate environmental and social risks as the supply chain develops.

Existing interest from Australian companies provides a basis for investment in Vietnam’s rare earth sector. Leveraging Export Finance Australia to offer concessional financing and risk mitigation could catalyse joint mining and processing projects, especially given Vietnam’s ambitions to increase foreign investment in its rare earth sector.

Priority should be given to strengthening Vietnam’s capacity to refine rare earths to over 95 per cent purity — the purity level required for most technological and defence applications. Joint investment in pilot or commercial refining plants can facilitate technology transfer, operational know-how and safe radioactive waste management. Complementary research partnerships, scholarships and technical training would help build local expertise, while renewable energy use and Australian mining equipment, technology and services exports can support sustainable extraction. A phased model — potentially involving partners such as Japan in later-stage processing and metal production — would support gradual upgrading and supply chain diversification.

Cooperation with Vietnam on rare earths offers Australia a strategically coherent pathway to operationalise its 4R foreign policy doctrine. By reallocating segments of the value chain, Australia can strengthen resilience through economic diversification, deepen cooperation with middle powers, expand regional engagement by building Indo-Pacific supply networks and reinforce rules-based governance and stronger standards. While constraints remain, sustained, well-sequenced cooperation with Vietnam can help align Australia’s economic, strategic and normative objectives amid intensifying great power competition.

Hai Hoang Vu holds a bachelor’s degree in international relations from the Diplomatic Academy of Vietnam.

Anh Khoi Tran holds a Master of International Relations and a Master of Public and Social Policy from Macquarie University.