The European Union is intensifying efforts to secure Vietnam’s critical mineral reserves as part of a broader strategy to decrease dependency on Chinese supply chains. According to an internal document from June 2026 viewed by Reuters, the EU identifies Vietnam as a vital source for tungsten, rare earth elements, antimony, bismuth, and bauxite, the latter of which can serve as a source for gallium, CNBC Indonesia reported.
Market and Geopolitical Context
The current market context offers little room for maneuver: the IHSG index stands at 5,943 with a slight gain of 0.12%, the rupiah is at 17,893 per US dollar, Brent crude is at US$105.90, the 10-year US Treasury yield is at 5.24%, and the trade-weighted broad dollar index sits at 121.6—a combination that suppresses risk appetite for emerging market assets.
Strategic Shift Toward Defense Supplies
The push for closer cooperation is driven primarily by the EU’s urgent need to bolster its defense industry and mitigate supply chain risks. “Given Europe’s need to strengthen its arsenal and mitigate risks as quickly as possible, the EU cannot ignore Vietnam as a potential supplier of critical raw materials,” stated the document drafted by the EU delegation in Hanoi.
While Vietnam has historically exported tungsten and antimony to Europe, EU officials are now considering financial support to expand the country’s mining and processing capabilities. This support, which may include grants, loans, technical assistance, and export credit insurance, is intended to secure stable access for European markets. A spokesperson for the European Commission confirmed that the commission is currently evaluating potential concrete cooperation with Vietnam in the critical raw materials sector.
Competition for Mining Assets
The EU’s interest in Vietnam’s mineral sector comes amid heightened global competition. Internal reports highlight the failure of acquisition attempts by entities from Australia, the United States, and Canada to secure a majority stake in Masan High-Tech Materials, a primary supplier of tungsten to Germany. The document notes that the competition is not merely Europe against China, but also Europe against the United States and Canada in vying for the same assets.
Recent ownership changes have further complicated the landscape. Last month, Masan High-Tech Materials sold a 4.99% stake to the Elmet Group, a supplier for U.S. defense reserves, and is reportedly in discussions to sell an additional 5% to non-European investors. The EU document suggests these shifts pose risks to existing European supply lines. Furthermore, projects involving Australian firm Lynas Rare Earths and South Korean company LS Eco Energy have intensified the competitive environment, with EU officials noting that Europe risks falling behind in securing long-term access to these strategic resources.
Tax Governance Status
The diplomatic relationship has seen recent shifts regarding administrative transparency. On October 9, 2026, the Council of the European Union removed Vietnam from its "blacklist" of non-cooperative jurisdictions for tax purposes, moving it to "Annex II"—a list of jurisdictions actively working to meet international tax governance commitments, the Ikatan Konsultan Pajak Indonesia reported. Vietnam had been placed in Annex I in February 2026 following Global Forum reviews that showed the country did not meet required standards for tax information exchange on request. After implementing reforms, Vietnam earned a review, mirroring a status change for Panama, which had been in Annex I since February 2020 and also recently received a new Global Forum review regarding its compliance with international tax standards. Additionally, the Council of the European Union removed Belize from Annex II after receiving a positive assessment from the Global Forum.
Vietnam’s Ministry of Foreign Affairs welcomed the decision. Spokesperson Pham Thu Hang stated that the move recognizes Vietnam’s efforts to improve its legal framework and build a transparent investment environment, according to Vietnam.vn. The spokesperson also stated that Vietnam is prepared to continue exchanging information and collaborating with international partners, including the European Union, in a constructive, equal, and mutually beneficial spirit to promote tax transparency, improve corporate governance, and build a fair, profitable, and sustainable international business environment. The EU is scheduled to conduct its next update on these tax jurisdictions in February 2027.
Potential High-Level Discussions
While not yet officially announced, the topic of mineral cooperation is expected to be on the agenda during a visit to Brussels by Vietnamese leader To Lam, which four European and Vietnamese officials told Reuters is scheduled for next week. A document dated June 2026 recommends financial support for Vietnam’s mining and mineral processing sectors to ensure and expand European access to tungsten, bismuth, antimony, and titanium.
Frequently Asked Questions
- Why is the European Union targeting Vietnam’s mineral reserves now?
The EU is seeking to mitigate supply chain risks following export restrictions from China. The focus is specifically on securing materials like tungsten and rare earths to support the strengthening of European defense capabilities. - What specific financial tools is the EU considering for this partnership?
The EU is evaluating a range of support measures, including loans, grants, technical assistance, and export credit insurance, to help develop Vietnam’s mining and processing infrastructure. - What risks does the EU identify in this cooperation?
The internal EU document points to several challenges, including a lack of transparency regarding Chinese involvement in local projects, regulatory and political hurdles, and Vietnam’s requirements for technology transfers.
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