Located in Southeast Asia, the Socialist Republic of Vietnam has an abundant wealth of natural resources including coal, bauxite, oil and gas deposits, copper, hydropower, and timber. The main mineral exports in the country are coal and petroleum. The Vietnamese Ministry of Natural Resources and Environment manages mining projects. The protracted war in Vietnam hindered the exploitation of the natural resources in the country. The mining and quarrying industry employed 0.7% of Vietnam’s workforce and accounted for 9.4% of the nation’s Gross Domestic Product (GDP) in 2003.
Vietnam is a major producer of coal and the government owns all coal in the country. Vietnam uses this resource in domestic power plants and also exports to the Asia Pacific nations. In 2009, the US Geological Survey estimated coal production in Vietnam at 43,715 million tons. The Vietnam National Coal-Mineral Industries Group (Vinacomin) disclosed a plan to exploit about 1,351 square miles of the Red River Delta, which has the largest coal deposit in Vietnam. According to government statistics, coal mining employed 31% of the workforce in the mining and quarrying sector. Currently, the country is home to the world’s third largest coal power plant after China and India
The third largest reserves of bauxite ore in the world, according to the US Geological Survey, are in Vietnam. Tay Nguyen, Vietnam’s Central Highlands, has the majority of the reserves. The primary use of bauxite is in the production of aluminum. The Ministry of Industry and Trade in Vietnam estimates bauxite in the reserves at 5.4 billion tons. Despite this massive amount of bauxite, there is an annual production of 30,000 tons. The Vietnamese government approved a bauxite draft mining plan in 2007. Vinacomin planned six projects that cover an area of 695 square miles in Tay Nguyen to mine bauxite. Two of the projects in Dak Nong and Lam Dong provinces will produce about 600,000 tons per year. The plan will cost the country about $15.6 billion.
Oil And Gas
Vietnam is one of the three leading producers of oil in Southeast Asia. The state-owned PetroVietnam holds a monopoly in the oil industry and accounts for 20% of the national Gross Domestic Product (GDP) as well as contributing up to 25% of Vietnam’s state budget. PetroVietnam produced 7.3% more crude oil in 2016 than in 2015, and about 376.81 billion cubic feet of natural gas. These amounts generated revenue of $22 billion. The same year, the company exported 7.59 million tons of crude oil. The oil and gas industry procures more imported technology and equipment than any other sector. In the recent years, the oil and gas sector in Vietnam opened to foreign companies.
Tax Rise On Natural Resources In Vietnam
In 2017, the Ministry of Finance in Vietnam sought approval to raise taxes on the primary natural resources in the country. Some of the products to receive a tax raise included iron from 12% to 15%, gold from 15% to 20%, and bronze from 13% to 18%. Other resources affected were coal, sand, and precious stones such as rubies and diamonds. The new tax levels could depress foreign direct investment which had already decreased by 19.4% in 2017. South Korea had the largest new investment in Vietnam at US$1.1 billion.