CHLOR-ALKALI INDUSTRY OVERVIEW Roger Shamel, President Consulting Resources Corporation Lexington, Massachusetts

TOPIC OUTLINE BACKGROUND INDUSTRY OVERVIEW MERCURY-RELATED ISSUES SUMMARY AND CONCLUSIONS QUESTIONS

CONSULTING RESOURCES CORPORATION CHEMICAL MANAGEMENT CONSULTING FIRM FOCUSED ON BUSINESS RESEARCH AND ANALYSIS SPECIAL EMPHASIS ON CHLOR-ALKALIS FOUNDED IN 1981 BY ADL ALUMNI EMPHASIS ON QUALITY SERVICE SOURCE: CONSULTING RESOURCES CORPORATION

CHLOR-ALKALI INTERRELATIONSHIPS SOURCE: CONSULTING RESOURCES CORPORATION

CHLOR-ALKALI BUSINESS ACTIVITY CYCLES NOW GDP CHLORINE RELATIVE BUSINESS ACTIVITY LEVEL CAUSTIC SODA SODA ASH TIME CHLOR-ALKALI BUSINESS ACTIVITY CYCLES SOURCE: CONSULTING RESOURCES CORPORATION

U. S. CHLOR-ALKALI PLANT LOCATIONS M M M M M M M M M M M CHLORINE/CAUSTIC (“M” = some mercury capacity) SODA ASH U. S. CHLOR-ALKALI PLANT LOCATIONS SOURCE: CONSULTING RESOURCES CORPORATION

U.S. CHLORINE PRODUCTION: 1980 - 2005 (MILLIONS OF TONS) 14 10 6 2 1980 1984 1988 1992 1996 2000 2004 U.S. CHLORINE PRODUCTION: 1980 - 2005 (MILLIONS OF TONS) SOURCE: THE CHLORINE INSTITUTE AND CONSULTING RESOURCES CORPORATION

GLOBAL CHLORINE DEMAND BY END USE: 2002 TOTAL DEMAND = 45 MM TONS SOURCE: CONSULTING RESOURCES CORPORATION

GLOBAL CHLORINE DEMAND BY REGION: 2002 TOTAL DEMAND = 45 MM TONS JAPAN 9% SOURCE: CONSULTING RESOURCES CORPORATION

GLOBAL CAUSTIC SODA DEMAND BY END USE: 2002 TOTAL DEMAND = 48 MM TONS ORGANICS 28% INOR- GANICS 17% SOURCE: CONSULTING RESOURCES CORPORATION

KEY ISSUES IMPACTING CHLOR-ALKALIS SHIFTING TECHNOLOGY TIGHTENING REGULATION MATURE, CYCLIC GROWTH SOURCE: CONSULTING RESOURCES CORPORATION

KEY FACTORS INFLUENCING CHLOR-ALKALI PLANTS THE ECONOMY PLANT ECONOMICS REGULATIONS TECHNOLOGY SHUTDOWN COSTS KEY FACTORS INFLUENCING CHLOR-ALKALI PLANTS SOURCE: CONSULTING RESOURCES CORPORATION

SOME MERCURY CELL PLANT FACTS MERCURY FORMS AN AMALGAM WITH SODIUM THE AMALGAM YIELDS MERCURY AND CAUSTIC THUS, MERCURY (Hg) IS NOT CONSUMED 11 U.S. Hg PLANTS (27%) = 14% OF CAPACITY U.S. ABOUT 4% OF GLOBAL Hg CELLS SOURCE: CONSULTING RESOURCES CORPORATION

SOME MERCURY CELL PLANT ISSUES MERCURY CELL TECHNOLOGY IS MATURE MUCH STRICTER REGS, CONTROLS THAN BEFORE FUTURE GROWTH LARGELY MEMBRANE CELL MERCURY EXIT BARRIERS ARE HIGH MERCURY’S FUTURE HARD TO PREDICT SOURCE: CONSULTING RESOURCES CORPORATION

SUMMARY AND CONCLUSIONS A CRITICAL AND COMPLICATED BUSINESS MERCURY PLAYS AN IMPORTANT ROLE BUT INDUSTRY GROWTH IS IN MEMBRANES HANDLING EXISTING MERCURY IS COMPLEX OPEN DIALOG IS VITAL SOURCE: CONSULTING RESOURCES CORPORATION