Vietnam has significant mineral resources but lacks modern exploration technologies to develop them. The CPTPP and EVFTA agreements provide opportunities to attract foreign investment to modernize mining. However, Vietnam faces challenges such as inconsistent regulations, high taxes, and restrictions on importing exploration equipment. Adopting international standards, streamlining taxes and regulations, and increasing consultation with foreign investors could help Vietnam better utilize trade agreements to develop its mining industry through the introduction of new technologies and foreign expertise.

1. VIETNAM – MINING AND MINERAL RESOURCES – HOW THE CPTPP AND THE
EUVNFTA CAN ASSIST TO MODERNIZE AND UPGRADE FOREIGN DIRECT
INVESTMENT IN THE MINING SECTOR
Vietnam is rich in mineral resources but only a fraction of these have been discovered to date due to lack
of modern technologies and methods. With the increasing flow of FDI under the Comprehensive and
Progressive Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA),
Vietnam can enjoy many advantages to modernize the mining sector. However, some challenges hinder
Vietnam from seeking the benefits under the two agreements, such as lack of coordination and
communication among Vietnamese authorities, shortcomings in the Vietnam Mineral Law itself and
excessively high taxes and royalties compared to other countries.
1. VIETNAM’S COMMITMENTS IN THE MINING SECTOR UNDER CPTPP AND EVFTA
Vietnam has opened its mining investment regime under both CPTPP and EVFTA. The CPTPP outlines
several conditions for foreign investment in the mining sector in Vietnam. In particular, approval for foreign
investment will only be granted if the investment project is proved to bring net benefits to Vietnam. In
making this evaluation, the competent authority may take into account various factors, including the
project’s impact on economic activity, job creation, equipment and services made in and exported from
Vietnam, competition, and the compatibility of the project with other national policies, etc. Meanwhile, the
EVFTA offers a great opportunity for market access in the mining sector as it allows for the establishment
of joint ventures with maximum 51% of foreign capital contribution or 100% foreign-owned enterprises.
With regard to tariff, the CPTPP targets to remove custom duties for all mining-related goods imported
from member states and the EVFTA shall reduce almost all tariffs by up to 99%, which can attract the FDI
flows to the mining industry in Vietnam, especially mining equipment services and technologies and oilfield
service providers.
The EVFTA, which adopts core labor standard of the International Labor Organization, also provides better
working conditions for workers, which is a key aspect for laborers working on mining projects.
With the above commitments of Vietnam under the CPTPP and EVFTA, it is expected that new mining
methods and better technologies will be introduced to the mining sector in Vietnam, which will later bring
benefits in the exploration, mining, and processing of minerals.
2. BENEFITS OF TECHNOLOGICALLY MODERN EXPLORATION AND MINING IN
VIETNAM
By using modern technology, Vietnam can discover and develop many minerals in deeper surface deposits.
Having these metals sourced and available instead of importing them can help Vietnam develop
downstream high-tech manufacturing industries and establish itself as a dominant regional and global hub.
This is in line with the MPI Foreign Investment Agency’s emphasis on capacity building of manufacturing
and supporting industries in Vietnam and partnership with Vietnamese enterprises where possible.
Modern technological exploration and mining can also help Vietnam meet the Vietnamese Government's
commitments under COP26, aiming for environmental sustainability in the mining sector, as state-of-the-
art technologies in process, cycling, and refining base metal resources will reduce carbon dioxide emissions.
It also contributes to meeting the challenges of the Government’s strategy for its Socio-Economic
Development Goals (SDGs), particularly in mountainous areas with dominantly ethnic minorities, where
the mining projects are mostly located. Responsible mining can help alleviate poverty in these remote areas
by creating strong employment opportunities and enhancing local goods and services. In addition, it can
also improve physical infrastructure since mining has long been recognized to be one of the most effective
drivers of physical infrastructure improvement around the world.

2. Modern sustainable mining in Vietnam would therefore also meet two of the World Bank’s stated key
objectives of its Country Partnership Framework in Vietnam, which are to (a) deliver infrastructure and (b)
broaden the economic participation of ethnic minorities.
3. CHALLENGES AND ISSUES
 Consultation and clarification
Foreign investors require Vietnamese authorities seek detailed industry consultation on the key components
of the draft amended Vietnam Mineral Law, together with its guiding documents. For example, key mining
taxes require transparency on how minerals are valued. Since mineral grade is not an acceptable
methodology, a revenue-based system is recommended. In addition, since the last annual VBF in February
2022, the MOIT has issued a draft nickel sulfide concentrate standard. However, consultation before the
draft standard was limited to Vietnamese nickel producers only, which led to limited exposure to the
international commercial realities, input from international experts, and evaluation of other countries
regulating nickel mining and processing. Foreign investors have also been confused about the purpose of
the adopted standard, i.e., whether the standard is used to restrict import or export, to be a part of a review
of royalties or duties, related to future approval, or any other specific purposes.
 Mining industry long term investment and risk
Investment in the mining sector takes time and significant upfront investment in exploration and
development. Therefore, in order to attract quality direct foreign investment in the sector, the Government
should: (i) benchmark Vietnam’s fiscal regime against peer countries and provide a competitive fiscal
regime with those offered by other jurisdictions; (ii) simplify the current fiscal regime for ease of
explanation to investors; (iii) provide fiscal stability and reduce frequency of policy changes; and (iv)
continue improving internal standards and consider recognizing and adopting international mineral resource
standards (e.g. JORC).
Because there are many risks in mining exploration, the Government must ensure that exploration and mine
planning, the formulation of investment projects, and the development of mechanisms and policies will
encourage exploitation rationally and with best efficacy. Companies that have a proven track record of
conducting technically advanced and environmentally responsible exploration programs should be granted
with priority in their future applications.
 Scientific research and technological development
In October 2021 at a series of ASEAN Ministerial Meetings on Minerals, it was suggested that the minerals
industry must take the lead in digital transformation, scientific research, technology development, and
investment in all stages of the mineral value chain.
However, foreign investors and foreign-invested mining companies have been hindered from testing and
applying new technologies due to restrictions on temporary import into Vietnam of research piloting
equipment. Furthermore, detailed studies of various ores at world-class research facilities are limited due
to the inability to export samples out of Vietnam for study purposes.
To address this issue, the Government should increase funding for Vietnam research facilities and ease the
import-export restrictions.
 Amending the Vietnam Mineral Law and reducing mineral taxes
High natural resource tax and the fee for granting mining rights prevent large mining companies from
operating in Vietnam. Therefore, Vietnam needs to introduce a more competitive fiscal regime.
4. CONCLUSION
The review and revision of Vietnam’s 2010 Mineral Law must be open and consultative, allowing the
opportunity for input from Vietnamese and FDI mining companies and experts. This is to ensure a clean

3. and environmentally sustainable mining and to take advantage of the EVFTA as well as the CPTPP, and to
further contribute to Vietnam’s impressive economic growth in the upcoming years.
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Please do not hesitate to contact Dr. Oliver Massmann at omassmann@duanemorris.com if you have any
questions. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.