The European Union is seeking closer cooperation with Vietnam to secure supplies of critical minerals and reduce its dependence on China, according to internal EU documents reviewed by Reuters, as growing geopolitical tensions expose vulnerabilities in Europe’s industrial and defence supply chains.
Documents prepared by the EU delegation in Hanoi in June 2026 recommend financial support for Vietnam’s mining and mineral-processing industries to expand European access to tungsten, bismuth, antimony and titanium. The proposals also highlight Vietnam’s substantial reserves of rare earths and other resources that could help diversify European supplies.
The documents warn that Europe cannot afford to overlook Vietnam as it seeks to strengthen its defence capabilities and reduce strategic dependence on China, the world’s leading producer of several critical minerals.
Beijing’s export restrictions introduced last year disrupted European supply chains, intensifying concerns about the availability of materials essential to defence manufacturing, advanced technology and industrial production.
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The proposed partnership would represent a further step in the EU’s efforts to diversify its critical raw material supplies as competition for strategically important resources intensifies.
Why Vietnam Matters to Europe’s Critical Minerals Strategy
Vietnam possesses substantial deposits of tungsten, rare earths, antimony, bismuth and bauxite. Gallium, another strategically important material, can also be extracted as a byproduct of certain processing activities.
Despite these resources, Vietnamese exports to the EU have largely been concentrated in tungsten and antimony, both of which have applications in defence production, including ammunition and explosives.
The EU documents recommend maintaining and expanding access to these materials while developing closer cooperation with Vietnam’s processing industry.
The proposed measures include loans, grants, technical assistance and export-credit insurance to support mining and processing projects. The documents also call for more accurate mapping of Vietnam’s mineral resources to improve assessments of their commercial potential.
Processing is particularly important because access to mineral deposits alone does not guarantee reliable supplies. The ability to refine raw materials into industrially usable products can determine how much value a country captures and whether it can serve as a dependable supplier to European manufacturers.
The documents argue that supporting processing capacity could be less politically sensitive than directly investing in mining operations, offering Brussels another route to strengthen its position in Vietnam’s critical minerals sector.
An EU spokesperson confirmed that the European Commission was assessing opportunities for concrete cooperation with Vietnam in the sector.
China’s Export Restrictions Raise Supply Chain Concerns
China’s dominance across several critical mineral supply chains has become a strategic concern for European policymakers, particularly as the bloc seeks to expand defence production and strengthen economic security.
Restrictions on Chinese mineral exports have demonstrated how disruptions can affect industries far beyond mining. Tungsten and other specialised materials are used in industrial equipment, electronics and defence applications, making uninterrupted supplies important to European manufacturing.
The EU’s interest in Vietnam reflects a broader effort to reduce these vulnerabilities by developing alternative sources rather than relying heavily on a single supplier.
However, diversification will require more than establishing commercial relationships. Europe must compete with other countries seeking access to the same deposits, processing facilities and industrial partnerships.
The documents warn that competition from partner countries could disrupt existing European supplies, particularly if foreign investors acquire stakes in strategically important Vietnamese operations or direct production towards other markets.
This creates a dilemma for Brussels: cooperation with other countries can expand investment and processing capacity, but competition for ownership and output could also leave European manufacturers with less secure access to materials.
Foreign Investment Complicates Europe’s Plans
One of the EU documents highlights a failed effort last year by entities from Australia, the United States and Canada to acquire a majority stake in Masan High-Tech Materials, which operates Vietnam’s largest tungsten operation.
The complex includes a mine and refinery and is an important tungsten supplier to Europe, particularly Germany. However, exports fell significantly last year amid administrative bottlenecks and rising tungsten prices.
The document warns that the proposed acquisition, reportedly orchestrated by Australian mining company EQ Resources, carried risks for existing European supplies.
Masan High-Tech Materials sold a 4.99% stake to Elmet Group last month. Elmet supplies tungsten to the US defence stockpile. The Vietnamese company is also reportedly discussing the sale of a further 5% stake to another foreign investor outside Europe.
These developments illustrate the growing international competition to secure control over critical mineral assets. As governments and companies seek to strengthen their supply chains, ownership decisions could influence where materials are processed and which markets receive them.
The EU documents also identify a proposed rare earth metals project involving Australia’s Lynas Rare Earths and South Korea’s LS Eco Energy as another initiative that could leave Europe at a disadvantage.
The project would use imported feedstock to produce rare earth metals in Vietnam. The documents suggest that without greater European engagement, other international partners could establish stronger positions in the country’s processing industry.
Vietnam Offers Opportunities but Carries Investment Risks
Closer cooperation would not be without challenges. The EU documents identify regulatory obstacles, political hurdles, limited transparency regarding potential Chinese involvement and Vietnam’s economic nationalism as risks for European investors.
Technology transfer requirements could also complicate investment decisions, particularly for companies seeking to protect commercially sensitive expertise.
For Brussels, the challenge is to build a reliable partnership while navigating Vietnam’s domestic industrial priorities and its relationships with competing international powers.
Vietnam’s position could give it greater leverage as the EU, United States, Australia, South Korea and other economies compete for access to critical minerals. Hanoi could use this interest to attract investment, develop domestic processing capabilities and move further up the value chain.
However, the EU would need to ensure that financial support translates into dependable commercial access rather than simply helping other investors strengthen their positions.
Trade and Diplomacy Could Shape the Partnership
The proposed mineral cooperation is part of a wider effort to strengthen EU-Vietnam relations.
Vietnam is not currently among the EU’s 16 strategic partners on critical raw materials. The documents urge European institutions to prepare concrete outcomes ahead of Vietnamese leader To Lam’s expected visit to Brussels, with meetings reportedly scheduled for October 22. The visit has not been officially announced.
The timing is significant as EU leaders are expected to discuss ways to reduce dependence on Chinese goods and raw materials while securing alternative supplies.
Other economic issues could also influence the discussions. Brussels recently removed Vietnam from its tax-haven blacklist, while Hanoi has urged EU member states to ratify an investment protection agreement signed in 2019 that remains blocked by several countries, including France.
Vietnam has also pressed the EU to lift a warning concerning its fisheries.
Progress on these issues could help establish a broader framework for economic cooperation, although the critical minerals negotiations will have their own commercial and regulatory challenges.
What Happens Next?
The immediate test will be whether the EU can translate its proposals into investment commitments, processing partnerships and more reliable mineral supplies.
Financial support for Vietnam’s processing industry could help Europe diversify away from China, but the results will depend on investment conditions, regulatory cooperation and competition from other international partners.
For Vietnam, increased European interest offers an opportunity to attract capital and develop a more advanced domestic minerals industry. For the EU, it represents a potential way to strengthen economic security and support its defence ambitions.
The broader strategic question is whether Europe can diversify its supply chains quickly enough to reduce its exposure to geopolitical pressure without becoming dependent on a different set of external suppliers.
Vietnam could become an important part of that effort, but building a resilient critical minerals network will require sustained investment, transparent supply arrangements and closer diplomatic engagement.
With information from Reuters.
