OR/18/068 Introduction

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Bide, T P, Brown, T J, Petavratzi, E, and Mankelow, J M. 2018. Vietnam – Hanoi city material flows. Nottingham, UK, British geological Survey. (OR/18/068).

Since the late 1980s, Vietnam has experienced significant economic growth due to market reforms; such growth has transformed the country from a ‘low income economy’ to a ‘low middle income economy’ (as defined by the World Bank) (World Bank, 2018a[1], b[2]; World Bank Data Team, 2016[3]). Economic growth has also been linked directly to rapid urban development (Arouri et al., 2017[4]) and the associated demands for housing, infrastructure, energy, water, and waste management. All of these strands of growth increase the demand for raw materials and in the context of this study, minerals.

From about 20 per cent in 1990, the percentage of Vietnam’s population living in urban areas increased to approximately 35 per cent in 2016 (General Statistics Office of Vietnam (GSOV), 2018[5]). It is projected that 50 per cent of the total population will live in cities by 2050 (UNEP, 2017[6]). In order to accommodate a rising urban population, there are currently ambitious plans for additional urban development of Hanoi (Iwata, 2007[7]; Leducq and Scarwell, 2018[8]). Such urban development will require considerable quantities of raw materials. Meeting such demand in a rapidly urbanising economy, however, will also need to be achieved while minimising negative effects on the environment.

Between 2008 and 2016, the production of aggregates within Vietnam increased by 23 per cent, from 410 billion tonnes to 503 billion tonnes (General Statistics Office of Vietnam (GSOV), 2018[5]). Construction aggregates in the form of crushed rock and sand and gravel are required for the production of cement, concrete, fill material and in road construction. In addition to aggregate, steel, timber and bricks are also required for the construction of buildings along with a wide spectrum of other metals and industrial minerals, which are necessary for specific construction applications (for example, copper in cables, gypsum in plasterboard and many more). An even wider range of minerals is essential for the manufacture of products that become indicative of improving standards of living.

If flows of such raw materials are constrained, then economic growth and a country’s development can be adversely affected. A restricted supply of construction raw materials during periods of high demand mean they can become prohibitively expensive, resulting in delays or cancelation of projects. Likewise, the mineral-based feedstocks necessary for manufacturing and industry may also become restricted with a resulting detrimental impact on economic growth. Constrained supply of raw materials can also lead to illegal mining operations in order to fulfil demand which can, in turn, cause great harm to the environment (Dung, 2011[9]). There is evidence that all these effects are currently occurring in Vietnam where the rapid economic growth and recent urban expansion are causing a strain on raw material supply (Cafef, 2017[10]; Viet Nam News, 2017a[11]; Vietnam News Agency, 2017[12]; Vietnamnet, 2017[13]). In addition, many neighbouring countries, such as Malaysia and Indonesia, are also following similar trajectories for continued economic growth and urban development, which requires access to raw materials. Sometimes these materials are sourced from other countries, thereby compounding supply issues within the source country. Competition for raw materials in South East Asia is unavoidable. With it comes the risk of supply disruption if planning for access and use of raw material flows and stocks does not take place. This is not only an issue of concern at national level, is also a concern at the region and city levels.

The effects of supply shortages have already made an appearance in Vietnam. Sand prices rose by up to 100 per cent in 2017, believed to be due to supply restrictions related to the enforcement of environmental restrictions and a clampdown on illegal mining (Viet Nam News, 2017b[14]). For example, sand mining in the northern provinces of Bac Ninh and Ba Giang has been suspended until an inspection of operations is completed. This is causing significant issues in construction project development as contracts have been agreed on lower prices and insufficient amounts of material are now coming onto the market. Likewise in June 2017, prices for sand were reported to have risen by 40 per cent for major road construction projects because of a shortfall in required volumes (Vietnamnet, 2017[13]). A report in August 2017 from the ministry of construction states that prices increased from between 50 per cent and 200 per cent between March and April. By the end of March the price for sand for concrete in Hanoi rose to 200–300 thousand VND per cubic metre (Vietnam.net, 2017[15]).

The Greater Hanoi area is set for rapid urban expansion over the next 10–20 years with the city developing a major new road network, new rail links, an expanded core, five satellite urban areas and three eco townships (Perkins Eastman, 2011[16]). To meet these ambitious targets large quantities of raw materials are required. It is within the context of this planned urban development and the associated increasing demand for raw material supply that the current research has been undertaken. The research consisted of a scoping study to assess the feasibility of conducting a material flow analysis (MFA) for Hanoi, with a particular focus on assessing the availability of required data. The availability of data on the production, trade, consumption, and demand for construction-related mineral commodities at a national, regional and city level within Vietnam was assessed. Although current levels of publically available data are insufficient to allow a full MFA analysis we present the results obtained from a preliminary analysis of material supply and demand in Hanoi. Supply and demand scenarios up to 2030 for several commodities important for the construction sector have been evaluated. Recommendations are also made for future application for MFA in Hanoi.


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