This is reportedly because of lack of supervision. Both the State and local people benefit from the operations, but only at the bottom end of the scale.

The reality is that Viet Nam has about 5,000 mines extracting more than 60 kinds of minerals. The industry is said to provide up to 11 per cent of the nation's GDP and provide more than 430,000 jobs.

Lai Hong Thanh, head of the Administration for Mineral Activities, said it was imperative that authorities obtained correct details of the minerals or ore extracted so that full taxes and fees were paid. However, he admitted the task was daunting unless radical changes were made.

A report by the Ministry of Natural Resources and the Environment shows that 79 licences have been issued for mineral exploration since last May. However, central agencies have granted another 503 licences - and local people's committees a whopping 4,200 licences over the years.

However, Thanh said up to 70 per cent of the miners failed to submit regular reports on the quantities of minerals they have extracted. This meant that authorised agencies had little idea of how much was actually coming out of the ground and therefore failed to collect sufficient taxes from the miners.

Truong Xuan Cu, deputy head of the Northwest Region Steering Committee, told Thoi bao kinh te Viet Nam (Vietnam Economic Times) said that the mineral-rich mountainous northern area attracted many miners, but brought only modest benefit to locals.

Most were offered nothing but hard work. Many even lost cultivation land and supplies of clear mountain water.

Pham Quang Tu from the Institute of Consultancy and Development blamed two things for the lopsided development - the lack of a perfect legal framework for mining operations and inadequate supervision.

Tu said inspections were only carried out every two years, adding that this was inadequate and ineffective to control the large number of miners throughout the nation.

According to the US Revenue Watch Institute, Viet Nam ranks 43rd out of 58 nations in terms of mineral-resource management, and 50 in terms of supervision of mining activities.

Tu said the problem was the modest number of licences granted by the ministry compared to the hundreds and thousands granted by local authorities.

Under current laws, work at big mines can only be carried out after approval by central agencies. However, local authorities dodge the laws by granting licences to different parts of a project.

According to experts, the State should use only one agency to manage mineral exploitation, perhaps the Ministry of Natural Resources and Environment.

They said the State should revoke the mining licences of those who claimed to make nothing from their endeavours, thus avoiding tax payments.