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The Hunt for Minerals in Paraguay

Me and FamilyI ask Melissa Woltmann, “So, what does your father do?”

The seven-year-old rubs her eyes and shrugs, “He finds important things in the ground.”

As a geologist specializing in rare earth element extraction, Gustavo Woltmann’s profession is perfectly summed up by his young daughter.

I am meeting the Woltmann family in a hotel room in Shanghai, China. Gustavo, his wife Eva-Marie, and two children, Me and FamilyMelissa and Thomas are all worn out after the eighteen hour flight from Paraguay to China.

Gustavo’s personal energy reserves seem to be fueled by some mysterious source though. Perhaps it’s his hope and ambition that allow him to keep going when most would need a good long rest.

“I’m meeting with a fellow geologists here. My desire is that he will agree to my terms and partner up with me back in Paraguay.”

The dream is that with the industry of rare earth element mining finally opening up to a global market, that Gustavo Woltmann will be able to find another excited geologist who is eager to discover potential rare earth minerals, in his home country of Paraguay.

Before interviewing Mr. Woltmann, the term “rare earth elements” sounded like something out of a science fiction book to me. I had no idea that these important metals where in the very objects that millions of people use everyday.

Everything from hybrid cars to tiny ear bud headphones all utilize one or more of the seventeen rare earth elements, which are found dispersed in the earth’s curst. Contrary to the name, the elements in themselves are not rare, appearing individually throughout most landscapes. However, it is rare for the minerals to be clustered together in a fashion that allows it to be economically advantageous to extract them through mining.

Family BondingThere are many reasons Gustavo Woltmann is choosing to start this venture now. One of them being the rise in green energy. Things such as wind turbines and hydroelectric cars are all dependent on rare earth metals and with their increase in the market, rare earth element demand rises as well.

In addition, Gustavo is focusing on rare earth elements now thanks to the very country he and his family are currently in, China, who currently fills 95% of the world’s supply of rare earth metals. He tells me his motivation is to bring Chinese talent to Paraguay to find potential deposits back home.

“If you want to find rare metals, go find the talent that has been finding them successfully in China for years and learn from them.” He confidently tells me that there is an innumerable amount of independent geologists here that are excited to expand beyond the mining industry of China and move into a more global environment.

Since 2001, when China joined the World Trade Organization, they have been dominating the world of rare earth elements. Their extraction rate of rare earth elements is so high, and exported so inexpensively, that they have nearly monopolized the industry.

This chokehold on the market was noticed in 2012 by Japan, The European Union and The United States when they all jointly filed a trade case to put limitations on China’s exportation of rare earth metals. The effects of this case are slowly being felt the world over, by mining companies big and small.

“Of course the biggest breakthrough would be to find some gas and oil deposits, but we do not have the geology that suggests that we have those kinds of reserves. Instead, my company is looking to find other mineral resources in high demand now, such as neodymium and lanthanum.”

Gustavo Woltmann’s incentive to bring this industry to his home country is a complicated one. He passionately explains to me that Paraguay has all the resources in place to get an active mining industry going, he just needs to find the deposits. He is hoping that Paraguay’s poor economy will make prices for these metals competitive, especially for countries that do not wish to trade with the China in the future.

Paraguay is a beautiful land of paradox. Being one of the poorest countries in the world, much of their economic activity comes from food agriculture. They are a country based in farming but find it difficult to export their goods since they are a landlocked country.

The population of Paraguay is lower than the surrounding areas, with 11 inhabitants per square kilometer. However, this small population is mostly comprised of a young people that are eager to find work.

Gustavo is hoping to find mineral deposits where others have failed and be able to put Paraguay to back work. Helping it achieve economic equilibrium with its neighbors, Brazil, Argentina, and Bolivia.

Paraguay’s mining industry could certainly use the boost from a finding like the one Gustavo Woltmann is after. Their mineral resources are seen as weak with only common materials like, clays and cement components being exported.  Currently only .1% of the countries GDP’s is accounted for in mining, but hopefully with a discovery of rare earth elements, that number would grow and assist the struggling economy.

“South America has a history in rare earth mining, before China came into it. So, this gives me hope…”

The energy and pep seemed to suddenly drain from Gustavo's voice. He rubbed his rough hands through his hair and looked for a long moment at the bed, where his two children were asleep. He sighed and with a solemn reservation tell me about his dreams.

“I want them to have a future. I want Melissa and Thomas to be proud of Paraguay, not run away as so many young people do now. I was tempted when I was a teenager to leave and move to Brazil or Argentina. The economy struggles to gain momentum, we are not competitive with our neighbors. There is no reason to lie down and accept this fate. I am taking the only thing I know…geology and investing it towards the future of my country. So my grandchildren can have a beautiful and safe country to live in and not feel like running away.”