In a dispatch sent to the Ministry of Industry and Trade, the Ministry of Finance proposed that a possible ban on ore exporting be considered while limiting issuance of new extraction licenses.

A separate export license should be required for specific types of ores that can be exported raw, the ministry suggested.

According to Luu Manh Tuong, director of the Tariff Department under the General Department of Vietnam Customs, the proposal is in line with government principles which discourage exports of raw resources while encouraging exports of deeply processed products that are high in added value.

He added that tariff measures are no longer feasible in preventing the drain of unprocessed ores, as the country already imposes maximum export duties of 30-40 percent for certain types of raw minerals such as iron, manganese, copper, lead and zinc.

Raising the tax any further would be inappropriate and unlawful, Tuong explained.

“Therefore, the only option left is to use nontariff, technical barriers to trade, which fall under the scope of governance of the Ministry of Industry and Trade,” he said.

A titanium mine in Binh Thuan Province in south-central Vietnam. Photo: Tuoi Tre

Dr. Nguyen Thanh Son, a mineral expert, said the question of Vietnam banning ore exports had been raised as early as 1993, but authorities have since been unable to provide a clear definition of  ‘raw’ and ‘processed’ minerals.

“For some minerals such as copper, deep processing is counterproductive since it costs more to process copper ores into its metallic form than simply purchase the metal,” Son explained.

“On the other hand, minerals such as titanium must definitely be processed deeply, as the deeper it is processed the higher value it yields,” he added.

The professional therefore suggested that specific policies should be available for different types of minerals rather than a blanket regulation that is applicable to all.

Tran Van Men, director of the Geology Department under the General Department of Geology and Minerals of Vietnam, agrees with the finance ministry’s proposal that “there should be a ban on extracting raw minerals and exporting them right away.”

“We hope that more studies and research would become available based on which authorities can roll out regulations on the ‘processing threshold’ for different minerals,” Men said.