Nickel prices skyrocket, what opportunities are there for Vietnamese investors in Laos?

The current fluctuations in the global Nickel market are bringing many opportunities for mining investors in Vietnam.

As an important metal used in the production of steel, alloys, ... Nickel directly affects the global industry. Especially now, the demand for Nickel is increasing because this metal is used to make batteries for electric vehicles. Recently, information about the sudden increase in Nickel prices has caused Nickel transactions to freeze indefinitely, traders are in trouble and a series of businesses may go bankrupt. However, this is a good opportunity for mining investors in Vietnam and around the world.

Unprecedented market fluctuations and opportunities for investors
The Covid-19 pandemic and most recently the tense war between Russia and Ukraine have severely affected the global economy, especially the mining industry. The reason is that Russia holds a large supply of minerals in the world and the disruption of the source has also created many economic problems, including the unusual increase in the price of Nickel.

Specifically, in recent days, the press has reported that at 5:42 a.m. on March 8 in London, the Nickel market began to be seriously disrupted due to the sudden spike in Nickel prices to a record high of 30,000 USD/ton in just a few minutes. After 6:00 a.m., this figure exceeded 100,000 USD/ton.

Mr. Bui Quang Ha - Chairman of the Board of Directors of CAVICO Vietnam - one of the leading enterprises in mineral exploitation, currently investing in a large Nickel mine in the Top 10 in Laos said: The Covid-19 pandemic along with the tense war between Russia and Ukraine has greatly affected the mineral exploitation industry, in both positive and negative ways.

On the positive side, almost all products from the mining industry such as iron ore, copper, lead, zinc, nickel, oil, etc. have increased sharply in price. Thanks to that, investors certainly have the opportunity to increase profits. However, input factors such as gasoline, explosives, chemicals, labor, etc. will also increase in price. This may be a disadvantage for businesses. However, in terms of cost structure, these factors only account for about 35%. Therefore, the cost structure is still favorable for the mining industry.

Nickel mining in Vietnam - opportunities and challenges

In Vietnam, the supply of Nickel is considered not large. According to Mr. Bui Quang Ha - Chairman of the Board of Directors of CAVICO Vietnam Joint Stock Company, the total forecasted volume of the three regions of Thanh Hoa, Cao Bang, Son La that can be exploited and processed in the next 20 years is only about 130,000 tons of Nickel metal, which is about 6,000 tons of Nickel metal/year. Compared to the world's annual consumption of 3 million tons of Nickel metal/year (according to statistics in 2021), this number is very small. However, if Nickel forms a high price of over 20,000 USD/ton, our Nickel processing industry will also bring high profits to businesses. In fact, with current technology, the cost of processing Nickel metal products is only about 9,000 USD/ton.

Faced with the above situation, the problem for Vietnamese investors is to increase output to meet the growing demand of the world industry. This requires businesses to look for places with greater potential for exploitation in the future, and shifting investment direction to countries in the region is inevitable.

It is known that mineral mines in Laos have been invested in by a number of enterprises for many years, of which CAVICO Vietnam Joint Stock Company is currently exploiting the only Nickel mine in Laos. CAVICO Chairman added: "We have been shifting our investment to mineral mines in Laos for more than 10 years. CAVICO's mine project is expected to exploit and process 30 tons of gold and 400,000 tons of nickel from 2022 to 2042 and will continue in the coming years depending on market developments.

A good sign is that Cavico's nickel mining projects in Laos have received special attention from the Vietnamese and Lao governments. This is also a project that contributes to developing friendly relations between the two countries. In particular, the mineral mining license in Laos and the overseas investment license in Vietnam of Cavico Joint Stock Company were both honored to be signed and directly awarded during the visits of the heads of state of the two countries.

This is a great honor for Cavico Vietnam in particular and the mineral mining industry in Vietnam in general, but it is also a challenge for businesses determined to put the project into operation. effective and bring economic benefits to both countries.

Assessing the opportunities and challenges for investors in mineral exploitation in Vietnam, the Chairman of Cavico Vietnam said: "The inevitable trend of all precious minerals is to increase steadily due to increasing market demand while the exploited reserves are gradually decreasing. Therefore, there are always opportunities for investors. However, opportunities also come with challenges: having enough financial resources, constantly improving, applying advanced technology in mining and processing to be able to compete and bring investment efficiency to businesses".

It can be seen that market fluctuations along with support policies from the government are bringing great opportunities for mineral investors in Vietnam. However, whether or not to seize the opportunity and bring economic benefits depends on the capacity of the business. Hopefully in the future, there will be many Vietnamese businesses that dare to think and dare to do, contributing to boosting the country's economy through mining projects like CAVICO Vietnam.

Anh Duong

Economic life