Japanese investors have offered to help Vietnam explore its large rare earth reserves.
Nguyen Manh Quan, director of the Ministry of Industry and Trade's Heavy Industry Department, said Japanese investors have proposed to cooperate with the ministry to mine rare earth minerals in Vietnam.
However, as the matter involves natural resources, it needs to be approved by the government, he said.
Quan said it would be a great opportunity for Vietnam to work with Japan. "We have only explored a small part of our rare earth reserves due to a lack of market (for the product) and insufficient technology," he said.
Japan is a larger buyer of rare earth minerals and also has advanced technology, he noted.
Japan and Vietnam are set to agree on the joint development of the rare earth mining later this month, with the former providing exploration and smelting technologies for mining in Vietnam, the business daily Nikkei reported.
The report came after China stopped shipments of rare earth minerals to Japan last month. China, which controls more than 95 percent of the global market for rare earth minerals, has not officially declared an export ban, but all 31 Japanese companies handling rare earth minerals have reported disruption to shipments, AFP reported.
Nguyen Khac Vinh, chairman of the Vietnam Geology Federation, said that the world's rare earth reserves are estimated at 99 million tons, with an annual output of 125,000 tons.
There are 17 rare earth elements that are used in high-tech sectors like nuclear energy, aviation and aerospace, he said.
But Vinh also warned that rare earth mining creates radioactive waste and has impacts on the environment.
According to the Department of Geology and Minerals of Vietnam, the country, with the world's fifth largest rare earth reserve, is not mining rare earth minerals at present.
A study of a rare earth mine in the mountainous province of Lai Chau has been carried out. The department said Vietnam will not officially start rare earth mining for another one to two years.