Month: November 2023

Vietnam, with the world’s second-largest reserves of the rare earths used in such modern devices as electric vehicle batteries and smart phone screens, is intensifying mining of the critical minerals. The industry, though, faces high processing costs, environmental concerns, and the takedown of industry leaders for illegal mining and mineral sales.

Vietnam’s rare earth resources are second only to those of China, which has held a tight monopoly since the 1980s. With Chinese relations with the West becoming more volatile, many countries are looking for other sources for the elements.

“China produces about 60% of the world’s rare earths but what they process is over 90%,” Louis O’Connor, CEO of Strategic Metals Invest, an Irish investment firm, told VOA.

“It was not a good idea to allow one country to dominate critical raw materials that are critical to all nations’ economic prosperity and increasingly military capability,” he said.

O’Connor added that while China has the world’s majority of raw materials, its dominance over technical expertise in the complex and costly process of rare earth refining is even greater. China has 39 metallurgy universities and approximately 200 metallurgists graduate weekly in the country, he said.

“The ability to go from having the potential to end product — that’s the most challenging, complicated, and expensive part,” O’Connor said. “For Vietnam, even if they have the deposits, what they don’t have is the human capital, or the engineering expertise.”

Vietnam increased rare earth mining tenfold with its output hitting 4,300 tons last year, compared to 400 tons in 2021.  according to the U.S. Geological Survey. Vietnam said in July it plans to process 2 million tons of rare earth ores by 2030 and produce 60,000 tons of rare earth oxides annually starting in 2030. This year, China’s mining quota is set at 240,000 tons to meet the demand for the electric vehicle industry, according to Chinese government data.

The United States and other countries are interested in Vietnam increasing its production of rare earths.

“The U.S. wants Vietnam to become a more important supplier and perhaps replace China, if possible, because of the risk that the U.S. may face in relying on rare earth supplies from China,” Le Hong Hiep, senior fellow at the ISEAS-Yusof Ishak Institute in Singapore told VOA.

“Not only the U.S., but also other partners like Korea, Japan, and Australia also are working with Vietnam to develop the rare earth industry,” he said.

South Korean President Yoon Suk Yeol signed a memorandum of understanding in Vietnam in June to establish a joint supply chain center for rare earth minerals.

“We reached an agreement that there is more potential to develop rare earths together, as they are abundant in Vietnam,” Yoon said in a June 23 statement with Vietnam’s president Vo Van Thuong.

The United States signed such a memorandum on cooperation in the rare earths sector during President Joe Biden’s visit to Hanoi on September 9.

“We see Vietnam as a potential critical nexus in global supply chains when it comes to critical minerals and rare earth elements,” Marc Knapper, U.S. ambassador to Vietnam, said on September 13 during a digital press briefing. “We certainly want to work together to ensure that Vietnam is able to take advantage of its rich resources in a way that’s also sustainable.”

Scandal

However, a handful of Vietnam’s key rare earth enterprises have become entangled in scandal. On October 20, police arrested six individuals for mining and tax violations.

Police arrested Doan Van Huan, chairman of the Hanoi-based Thai Duong Group that operates a mine in Yen Bai province, and its chief accountant, Nguyen Van Chinh, for violating regulations on the exploration and exploitation of natural resources and accounting violations, the Public Security Ministry said. The two were accused of making $25.5 million from the illegal sale of rare earth ore and iron ore. Police raided 21 excavation and trading sites in Yen Bai province and three other locations. Authorities seized an estimated 13,700 tons of rare earth and more than 1,400 tons of iron ores, according to local publication VnExpress.

Although government statements did not state what made Thai Duong’s rare earth sales illegal, a source told Reuters raw Yen Bai mine ore had been exported to China to avoid high domestic refining costs, in violation of Vietnamese rules.

The chairman, Luu Anh Tuan, and accountant, Nguyen Thi Hien, of the country’s primary rare earth refining company, Vietnam Rare Earth JSC, were also arrested for violating accounting regulations in trading rare earth with Thai Duong Group. Dang Tran Chi, director of Hop Thanh Phat, and his accountant Pham Thi Ha were arrested on the same charge.

Looking at corruption in Vietnam’s rare earth industry will be “top of the list” for future investors, O’Connor said.

“Corruption levels would have to be looked at,” he said. “If you’re buying a metal that’s going to need to perform in a jet engine, for example or a rocket … they have to be sure of the purity levels. The chain of custody of these, it’s more important really than gold.”

Vietnam committed to industry

Hanoi is committed to developing the rare earths industry even though economic gains are limited by environmental and production costs, Hiep told VOA.

“Vietnam is now interested in promoting this industry mainly because of the strategic significance,” Hiep told VOA. “If you can grow this industry and become a reliable supplier of rare earth products for the U.S. and its allies, Vietnam’s strategic position will be enhanced greatly.”

“Whether that will be successful, we have to wait and see,” he added.

There are also environmental concerns for the growing industry, particularly as a crackdown on Vietnam’s environmental organizations and civil society leaves little room for public speech.

“The biggest challenge is going to be how do you handle the waste process from the mining,” said Courtney Weatherby, deputy director of the Southeast Asia Program at Washington’s Stimson Center told VOA.

“Ensuring that development happens in a sustainable way takes a lot of different actors,” she said.

But Duy Hoang, executive director of unsanctioned political party Viet Tan, said the room for outside actors to express concern over environmental and labor practices is narrowing.

“What we’re seeing is sort of a shrinking space for civil society to speak out and a number of the leading environmental activists are now in jail. We don’t have their voices which are very needed and I think there may be self-censorship going on by other activists,” he said. “There has to be accountability.”
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American leadership is essential in establishing norms and laws to “determine how we both glean the promise and manage the peril” of emerging technologies like artificial intelligence and digital economic and social platforms used to connect billions of people around the world, a White House adviser told VOA.

The Biden administration has rolled out a number of initiatives on the topic — most recently, an executive order that aims to set new AI safety and security standards. That order relies on cooperation from private developers and other countries, “because the attackers are in one set of countries, the infrastructure is in another and the victims are global,” said Anne Neuberger, deputy national security adviser for cyber and emerging technology at the National Security Council.

Neuberger sat down with VOA White House Correspondent Anita Powell to explain these complex, compelling technologies and how she thinks they have exposed the worst but also the best in humanity.

The following has been edited for length and clarity.

VOA: Thank you so much for sitting down with VOA today. Can you walk us through the concrete outcomes of the recent meeting between President Joe Biden and Chinese President Xi Jinping in the areas you cover — cybersecurity, AI and the digital economy?

Anne Neuberger, White House deputy national security adviser: Of course, strategic technologies are very important to both of our countries’ growth and national security — and we’re global players on a global stage. The most important part of the discussion was two leaders coming together to say: While we are in competition, we’re committed to working together on areas where we can collaborate – areas like climate change, like discussions of what are the rules for artificial intelligence.

VOA: Would you assess that the meeting made any progress, especially on AI regulation?

Neuberger: Certainly very good discussions related to an agreement for the countries to sit down and establish a working group on AI [about] appropriate guardrails and guidelines in this area.

VOA: I’m going to stick with AI and the administration’s recent moves, like the AI Bill of Rights and also the attempt to set some norms at the recent London summit on AI. Why does the administration think U.S. leadership matters so much here?

Neuberger: For two reasons. First, the United States is a committed democracy and AI is a major technology that brings both promise and peril. It is up to us to determine how we both glean the promise and manage the peril. President Biden has made that clear in his game-changing executive order that, as a country, we must manage the perils in order to glean the promise.

VOA: Speaking of the perils of AI, what is the administration doing to prevent the malicious use of generative AI in both conflicts and contests? I’m talking about conflicts like Israel and Ukraine, but also contests like the upcoming elections in Congo, in Taiwan and here in the United States.

Neuberger: We’ve seen new AI models that generate very realistic videos, very realistic images. In terms of generative AI related to elections, I want to lift up one of the voluntary commitments that the president negotiated, which was around watermarking: having a visible and potentially invisible mark on an AI-generated image or video that notes that this is AI-generated, to alert a viewer. An invisible mark could be used so that, even if there are attempts to remove this mark, the platforms themselves can still be able to portray that message and help educate individuals. This is still an area of evolving technology. It’s getting better and better. But companies made commitments to start marking content that they generate. And I know a number of social media platforms are also making commitments to ensure that they display messages to help consumers who see such content know that it is generated by artificial intelligence.

VOA: Moving on to cybersecurity and malign actors like North Korea and Russia, what is the administration doing to curb their work in this area?

Neuberger: We see North Korea really using cyberattacks as a way to get money because they’re such a heavily sanctioned regime. So North Korea moved from targeting banks to targeting … cryptocurrency infrastructure around the world. And the White House has had a focused effort to bring together all elements we have to fight that with Treasury Department designations.

There’ll be further designations coming up for the cryptocurrency mixers that launder funds stolen from those cryptocurrency infrastructures. We also have been working with the industry to press them to improve the cybersecurity of their systems as well as law enforcement. U.S. law enforcement has been cooperating with partners around the world to take down that server infrastructure and to arrest the individuals who are responsible for some of this activity.

VOA: Tell us a little bit about the counter-ransomware initiative you’re working on.

Neuberger: Absolutely. Essentially, criminal groups, many of which are based in Russia with infrastructure operating from around the world, are locking systems … in order to request that the system owners pay ransom. In the United States alone in the last two years, $2.3 billion was paid in ransom. It’s a fundamentally transnational fight. … What we’ve done is assemble 48 countries, Interpol [and] the European Union to take this on together, because we know that the attackers are in one set of countries, the infrastructure is in another, and the victims are global. As the White House built this initiative, we ensure that the leadership is diverse.

So, for example, the leaders of the effort to build capacity around the world are Nigeria and Germany — intentionally, a country from Africa and a country from Europe, because their needs are different. And we wanted to ensure that as we’re helping countries build the capacity to fight this, we’re sensitive to the different needs of a country like Nigeria, like Rwanda, like South Africa, like Indonesia. Similarly, there’s an effort focused on exercising information, sharing information together.

You asked about the key deliverables from this most recent meeting. I’ll note three big ones. First, we launched a website and a system where countries can collaborate when they’re fighting a ransomware attack, where they can ask for help [or] learn from others who fought a similar attack. Second, we made the first ever joint policy statement — a big deal — 48 countries committing that countries themselves will not pay ransoms, because we know this is a financially driven problem. And third, the United States committed that we would be sharing bad wallets [that] criminals are using to move money around the world so other countries can help stop that money as it moves as well. So that’s an example of three of the many commitments that came out of the recent meeting.

VOA: Let’s talk about the Global South, which has pioneered development of really interesting digital economic technologies like Kenya’s M-PESA, which was rolled out in, like, 2007. Now the U.S. has Venmo, which is modeled on that. How is the U.S. learning from the developing world in the development of these projects and also the perils of these products?

Neuberger: M-PESA is a fantastic example of the promise of digital tech. Essentially, Kenya took the fact that they had a telecom infrastructure, and built their banking infrastructure riding on that, so they leapt ahead to enable people across the country to do transactions online. When you look at Ukraine in the context of Russia’s invasion of Ukraine, Ukraine quickly moved their government online, really building on lessons learned from Estonia, to enable Ukrainians — many who are in Poland and Hungary — to continue to engage with their government in a digital way.

The U.S. Agency for International Development is tremendously proud of that Ukrainian project and is using it as a model as we look to other countries around the world. So we’re learning a lot from the creativity and innovation; what we want to bring to that is American development, skill and aid, and also plugging in American tech companies who can accelerate the rollout of these projects in countries around the world, because we still believe in the promise of digital. But you mentioned the peril, and that’s where cybersecurity comes in.

VOA: This lines us up perfectly for my final question, about the promise and the peril. In the digital world, people can hide behind anonymity and say and do awful things using tools that were meant to improve the world. How do you keep your faith in humanity?

Neuberger: It’s a tremendously important question. It’s one that’s personally important to me. My great-grandparents lost their lives in Nazi death camps. And those members of my family who survived — some survived through the horrors of the camp, some managed to hide out under false identities. And I often think that the promise of digital has also made our identities very evident. Sometimes when I’m just browsing Amazon online, and it recommends a set of books, I think to myself: I wonder how I’d hide if what happened to my grandparents came for me. So as a result, I think that even as we engage with these technologies, we have to ensure that vulnerable populations are protected.

So, the president’s working with AI companies to say companies have an obligation to protect vulnerable populations online, to ensure that we’re using AI to detect where there’s bullying online, where there’s hate speech that goes against common practices that needs to be addressed; where there are AI-generated images related to children or women or other vulnerable populations, that we use AI to find them and remove them; and certainly use law enforcement and the power of law enforcement partnerships around the world to deter that as well. Freedom of speech is a part of free societies. Freedom from harm needs to be a fight we take on together.

VOA: Thank you so much for speaking to our audience.

Neuberger: Thank you.
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Since the start of Russia’s full-scale invasion of Ukraine, drone production in the country has surged. Ukrainian businesses have shifted from manufacturing products for peacetime to producing equipment for wartime. From Kyiv, Myroslava Gongadze explains how Ukrainian ingenuity is altering the course of the war. Camera: Eugene Shynkar.
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The United States on Wednesday imposed sanctions on a virtual currency mixer the Treasury Department said has processed millions of dollars worth of cryptocurrency from major heists carried out by North Korea-linked hackers.

The U.S. Treasury Department in a statement said virtual currency mixer Sinbad, hit with sanctions on Wednesday, processed millions of dollars worth of virtual currency from heists carried out by the North Korea-linked Lazarus Group, including the Axie Infinity and Horizon Bride heists of hundreds of millions of dollars.

Lazarus, which has been sanctioned by the U.S., has been accused of carrying out some of the largest virtual currency heists to date. In March 2022, for example, they allegedly stole about $620 million in virtual currency from a blockchain project linked to the online game Axie Infinity.

“Mixing services that enable criminal actors, such as the Lazarus Group, to launder stolen assets will face serious consequences,” Deputy Treasury Secretary Wally Adeyemo said in the statement on Wednesday.

“The Treasury Department and its U.S. government partners stand ready to deploy all tools at their disposal to prevent virtual currency mixers, like Sinbad, from facilitating illicit activities.”

A virtual currency mixer is a software tool that pools and scrambles cryptocurrencies from thousands of addresses.

Sinbad is believed by some experts in the industry to be a successor to the Blender mixer, which the U.S. hit with sanctions last year over accusations it was being used by North Korea.

The Treasury said Sinbad is also used by cybercriminals to obscure transactions linked to activities such as sanctions evasion, drug trafficking and the purchase of child sexual abuse materials, among other malign activities. 

Wednesday’s action freezes any U.S. assets of Sinbad and generally bars Americans from dealing with it. Those that engage in certain transactions with the mixer also risk being hit with sanctions. 
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