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China’s attempt to control the global supply of heavy rare-earth elements was facing a setback. Vietnamese entrepreneur Luu Anh Tuan had secured U.S. support for a technology that could disrupt Beijing’s dominance over the critical minerals used in various products.
Tuan and his family had escaped from Vietnam to the U.S. to evade Beijing’s influence in Hanoi, where the Chinese Communist Party holds significant sway over domestic affairs.
In July 2023, he signed a technology transfer agreement, as revealed by Fox News Digital, to transfer the heavy rare earth separation technology from his Vietnam-based company, Vietnam Rare Earth (VTRE), to VTRU Corporation in Nevada. VTRE had also entered into several memoranda of understanding (MOU) agreements with Western companies.
“He felt insecure about staying in Vietnam. He was determined to move his technology to the U.S. as soon as possible,” a source familiar with the rare earth industry, speaking anonymously to avoid repercussions, told Fox News Digital.
At that time, the world relied entirely on Chinese companies for the separation of heavy rare earth metals.
“China has been working for over 20 years to establish this dominance,” said Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies.
Although companies like U.S.-based MP Materials and Australia-based Lynas are developing their own separation technologies, China still controls up to 90% of the rare earths separation and refining capacity, as well as over half of the mining output.
In October 2023, while Tuan, a U.S. permanent resident in the process of becoming a citizen, was back in his Hanoi office, Vietnamese authorities raided the building, seizing laptops and records. Seventeen employees were arrested, with all but one, Do Hanh Huong, Tuan’s sister-in-law and COO of VTRE, subsequently released.
The arrest occurred shortly after President Joe Biden’s visit to Vietnam, where cooperation agreements on rare earth minerals were signed.
In December, China banned rare earth extraction and separation in a move seen as an attempt to maintain its market monopoly.
“China’s restrictions made countries like the U.S. and Australia realize they lacked the technical expertise to do it themselves,” said Baskaran.
While the U.S. has one major rare earths mine, MP Materials’ Mountain Pass, the company was previously sending rare earths to China for separation. The trade war and export controls prompted the U.S. to stockpile rare earths until domestic separation capacity was sufficient.
Tuan was accused of falsifying a value-added tax receipt during rare earth trading with Thai Duong Group, which operates a mine in Yen Bai, Vietnam.
VTRE had partnered with Australian mining companies Australian Strategic Materials and Blackstone Minerals Ltd. Tuan and Dunham had also engaged with Nevada state officials and the Department of Energy to discuss plans for bringing the separation technology to the U.S. through VTRE.
The arrest coincided with Vietnam’s plans to auction the Dong Pao mine, with VTRE, supported by Western partners, being the sole qualified bidder.
This year, Tuan pleaded guilty in exchange for a reduced sentence. He was sentenced to 16 years in prison and fined $10 million, while Huong received a six-year prison term.
“We believe these charges were manipulated by Vietnamese state actors aligned with China,” said Dunham. “He was coerced into pleading guilty.”
Fox News Digital was unable to independently verify this claim. The State Department has documented credible reports of arbitrary arrests, torture, and inhumane treatment by authorities in Vietnam.
Tuan’s advocates claim that Thai Duong, the company from which he was purchasing ore, refused to provide invoices at the actual rate VTRE was paying, instead issuing lower-rate invoices to reduce taxable income.
According to Dunham, Tuan faced a dilemma: accept the lower-rate invoices and cover the tax differences with his own funds, or risk the collapse of his state-funded minerals project and business.
Although Tuan was convicted on criminal charges, Dunham argued that the accounting violation lacked evidence of criminal intent.
“Even if he had committed an accounting error, it does not warrant the criminal charges brought against him. Such sentencing is unprecedented in Vietnam. Typically, a fine would be imposed,” Dunham stated.
“He is the only individual outside of China with a fully integrated rare earth company, handling everything from mining to manufacturing magnets.”
Tuan was also convicted of smuggling rare earth materials, but customs documents showed clearance of 63 shipments of heavy rare earth oxide mixtures under the correct tax code, according to Dunham.
The Vietnamese Ministry of Public Security’s investigation found that customs officers overseeing VTRE’s exports had verified Tuan’s compliance.
China’s crackdown has intensified since then, with mineral experts required to surrender their passports to prevent technology sharing outside the country. Beijing has tightened controls on rare earth exports, raising concerns in the U.S. defense industry.
According to Dunham, VTRE had developed technology capable of producing heavy rare earth oxides at a purity of 95% from xenotime, monazite, and ion-absorption clay using a solvent extraction system. The technology could process various ore types and recycle NdFeB magnets.
Requests for help from the U.S. government have not been successful, according to Tuan’s advocates.
Tuan is isolated from his family and legal counsel, having seen his family only a few times since his arrest nearly two years ago.
“We are deeply concerned about his physical and mental well-being,” the source said. “He remains mentally resilient and believes the truth will emerge eventually.”
Fox News Digital has reached out to the White House, State Department, Chinese Embassy, and Vietnamese Embassy for comments.
