Europe opens markets to Vietnamese industrial minerals

By IM Staff
Published: Wednesday, 24 February 2016

Text of August 2015 deal released; rare earths, antimony trade to benefit and EU to supply lithium to nascent economy.

By Keith Nuthall

Details have been released explaining how the EU will open up its markets to rare earths and other minerals from Vietnam under a trade deal struck in August 2015, despite concerns the country is a conduit for smuggled raw materials from southern China. 

The agreement, which was made public on 1 February, indicates tariffs will be scrapped on industrial minerals traded between Vietnam and the EU. When the deal was initiated last year, experts warned IM that opening the EU to Vietnamese rare earths could create a route for re-exported, illegally produced minerals smuggled into Vietnam from China. 

The text confirms that EU-Vietnam rare earth trades will be liberalised. Once the agreement comes into force – which could happen next year – the EU will lift 3.2% duties on Vietnam-sourced compounds of yttrium, scandium and cerium. Further, 5.5% duties on strontium and barium will be phased out over four years. 

Tax on denatured salt for industrial purposes will be reduced from the current €1.70/tonne ($1.86/tonne*) and salt for human consumption will see a reduction from the present €2.60/tonne rate.

Bricks and ceramics with significant alumina content will have their respective 2% and 5% duties cancelled, while a 7% EU levy on Vietnamese unwrought antimony will be abolished once the deal comes into force, along with a 5% export tax applied in the country of origin.

Vietnam has promised to scrap a range of other export duties it uses to restrict exports of minerals it has preferred be made available to domestic manufacturers. The move could encourage exports of Vietnamese feldspar to the EU, which is currently subject to a 10% export duty. This will be phased out over the next 11-16 years, depending on factors such as calcium fluoride content.

The deal is also geared towards supporting Vietnam’s own manufacturing needs as an emerging economy. The publish text details an agreement  to scrap 20% and 5% duties on lithium imports from the EU within six years of the deal becoming law. Duties of 3% on clays, including andalusite, kyanite, sillimanite, mullite and chamotte will further be removed, along with a 3% tax on barite (barytes) and pumice.

Incumbent 6% duties on imports of EU-sourced superphosphates, calcined phosphatic fertilisers and mineral or chemical fertilisers containing nitrogen, phosphorus and potassium, will be phased out over eight years. Commenting on the terms of the deal, EU trade commissioner Cecilia Malmström, said that once ratified, "the agreement will unlock a market with huge potential for EU firms." 

"Vietnam is a fast-growing economy of more than 90m consumers with a growing middle class and a young and dynamic workforce," she added.

*Conversion made February 2016