Bauxite-aluminum is a commoditized market with single-digit growth, which makes cost-competitiveness critical to capital returns. Electric vehicles and renewable energy underpin accelerated growth for aluminum demand moving forward. However, because aluminum is easily recyclable, primary aluminum production is projected to grow by a CAGR of only 3% in 2020-2030, according to the International Aluminum Institute (IAI). 

Vietnam’s global presence in the industry is small despite its top-tier bauxite reserve. The upstream aluminum value chain is as follows: mining bauxite ore, refining bauxite into alumina (Al2O3) and electrolyzing alumina into aluminum (smelting). Although Vietnam accounts for more than 10% of global bauxite reserves, the country does not smelt aluminum. Vietnam is currently exporting 1.4 million tonnes of alumina per annum (1% of global demand). We attribute this underdevelopment to environmental concerns, the political significance of mining locations, electricity intensiveness of aluminum smelting and the lack of private players in the industry.

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