EU Seeks Vietnam’s Critical Minerals to Reduce Dependence on China Amid Supply Chain Risks

The European Union is seeking to expand access to Vietnam's critical mineral reserves as Brussels moves to reduce its dependence on China for materials essential to defense manufacturing, advanced technology and the energy transition, according to internal EU documents reviewed by Reuters.

The documents, dated June 2026, recommend financial and technical support for Vietnam's mining and mineral-processing industries, identifying the Southeast Asian country as a potential alternative supplier of tungsten, rare earths, antimony, bismuth and titanium. Vietnam also holds bauxite deposits from which gallium can be extracted as a byproduct.

The initiative comes as European governments seek to strengthen defense capabilities and secure industrial supply chains against the risk of further Chinese export restrictions. China dominates the production and processing of several critical minerals, giving Beijing considerable influence over materials used in electronics, semiconductors, renewable energy technologies and military equipment.

"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 report and an accompanying annex call for financial support to "maintain and expand current access notably to tungsten, bismuth, antimony and titanium." They warn that competition from other partner countries could disrupt supplies to Europe if the bloc fails to establish stronger commercial and industrial ties with Vietnam.

The documents also recommend closer engagement to "add an alternative to China," following Chinese export restrictions last year that the report said "disrupted European supply chains."

Although Vietnam possesses substantial mineral resources, its exports to the EU have largely been limited to tungsten and antimony, both of which have defense applications, including in ammunition and explosives. Expanding those flows would require investment in extraction, refining, processing and resource assessment.

The European Commission confirmed that cooperation was under consideration.

"The European Commission is currently assessing the potential for concrete cooperation with Vietnam in the critical raw materials sector," a spokesperson said when asked about the documents and a possible visit by Vietnamese leader To Lam to Brussels.

Four European and Vietnamese officials said To Lam was expected to visit next week, with meetings with EU leaders scheduled for October 22, although the visit had not been officially announced. Two officials said critical minerals were likely to feature prominently in the discussions.

The timing would place the talks after this week's European Council meeting, where EU leaders are expected to discuss reducing dependence on Chinese goods and raw materials while securing alternative sources of critical supplies.

Competition for Vietnam's Tungsten Raises Supply Concerns

The EU's push reflects concern that its access to Vietnam's mineral resources could be weakened by competing investments from other countries, including the United States, Australia and Canada.

One of the documents cites a failed plan last year involving entities from those countries to acquire a majority stake in Vietnam's largest tungsten operation, owned by Masan High-Tech Materials. The complex includes both a mine and a refinery and is an important supplier of tungsten to Europe, particularly Germany.

The proposed acquisition was reportedly orchestrated by Australian mining company EQ Resources, two people familiar with the matter told Reuters.

The EU document warned that the plan was "not without risks to existing supplies to the EU," suggesting that changes in ownership or commercial arrangements could affect where Vietnamese tungsten is sold.

Exports from the operation fell significantly last year amid administrative bottlenecks and soaring tungsten prices, adding to concerns about the reliability of supplies. The episode shows that possessing mineral reserves does not automatically translate into predictable exports: production capacity, regulatory approvals, processing infrastructure and commercial ownership can all influence the flow of materials to overseas buyers.

Last month, Masan High-Tech sold a 4.99% stake to Elmet Group, a tungsten supplier to the US defense stockpile. The company is also in talks with a non-European foreign investor over the sale of another 5% stake, according to two people familiar with the discussions.

Those transactions add to the competition for influence over a resource that has growing importance for defense supply chains. Tungsten is valued for its hardness, density and high melting point, making it useful in industrial applications and military equipment.

Europe's concern is whether additional output will be available to European buyers on reliable commercial terms as competing governments and companies seek to secure their own supplies.

The documents identify a separate rare-earth project involving Australia's Lynas Rare Earths and South Korea's LS Eco Energy as another initiative that could leave the EU at a disadvantage. The project would produce rare-earth metals in Vietnam using imported feedstock, rather than relying entirely on locally mined material.

The report characterizes the initiative as one "which risks leaving the EU behind" and urges Brussels to support Vietnam's processing sector.

Brussels Considers Financial Support as Investment Risks Persist

The EU documents propose loans, grants, technical assistance and export-credit insurance to help develop Vietnam's critical-minerals industry. They also recommend support for more accurate mapping of the country's mineral resources, which could help identify commercially viable deposits and guide investment.

Processing is presented as a promising area for cooperation because it may be less politically sensitive than mining operations. Developing domestic refining and processing capacity could help Vietnam capture more value from its mineral resources while giving European manufacturers another route to obtain processed materials.

However, the documents also caution that investments in Vietnam come with risks. These include limited transparency about China's involvement in the sector, regulatory and political hurdles, and what the report describes as Vietnam's "economic nationalism," including technology-transfer requirements.

Such conditions could complicate projects requiring advanced processing technology, long-term capital commitments, and predictable regulatory treatment. The EU would therefore need to balance its urgency to diversify supplies against the practical challenges of developing new sources outside established production networks.

Vietnam is not currently among the EU's 16 strategic partners for raw materials. A closer relationship would represent an expansion of Brussels' efforts to secure minerals through partnerships rather than relying predominantly on existing supply channels.

The minerals initiative is also unfolding alongside broader efforts to improve EU-Vietnam relations. Last week, Brussels removed Vietnam from its tax-haven blacklist. Hanoi has separately urged EU member states to ratify an investment protection agreement signed in 2019, which remains blocked by several countries, including France. Vietnam has also pressed the bloc to lift a warning concerning its fisheries.

These issues create a wider diplomatic context for negotiations, although the available documents do not establish that progress on investment protection, fisheries or taxation is conditional on an agreement over minerals.

Critical Minerals Become a Test of Europe's De-Risking Strategy

The proposed cooperation highlights a central challenge for Europe's effort to reduce dependence on China: alternative sources must be commercially viable, capable of processing raw materials to the required standards and able to deliver consistent supplies at scale.

Vietnam offers significant mineral resources and an opportunity to diversify procurement, but turning that potential into dependable supply will require capital, technology, infrastructure and stable commercial arrangements. Competition from other foreign investors could also limit the EU's access unless European companies establish stronger relationships with Vietnamese producers.

The urgency is heightened by Europe's defense requirements and the wider industrial demand for materials used in semiconductors, electronics and clean-energy technologies. Chinese export controls have demonstrated how restrictions on critical inputs can create disruption beyond the industries directly targeted.

Nevertheless, diversifying suppliers will not necessarily eliminate dependence on China if new projects continue to rely on Chinese technology, processing expertise, equipment or feedstock. The EU's own documents acknowledge the need for greater transparency about China's involvement in Vietnam's minerals sector.

Brussels is therefore considering a broader approach that combines financial support, technical cooperation and diplomatic engagement. The objective is to develop supply chains that are not only geographically diversified but also commercially reliable.

The expected talks with To Lam could provide an opportunity to advance that agenda, although concrete agreements and investment commitments remain unconfirmed.