1. Making the Business Case for Conversion
Peter Maxson, Director
Concorde East/West Sprl
UNEP Global Mercury Chlor-alkali Partnership
Expert Group Meeting to Identify Barriers and Opportunities
Vienna, Austria
28-29 June 2016

2. PMaxson - Making the Business Case for Conversion
Overview
Economic and regulatory aspects of conversion
Factors to consider
Highlights from “Cost of Conversion”
Regulatory requirements
Disposition of mercury stocks
Objective
Convince firms to convert? Or show the best way to convert?
PMaxson - Making the Business Case for Conversion

3. Factors to consider regarding conversion
Economic, regulatory
Domestic regulatory requirements
International agreements and obligations
The marketplace, present and future
Availability and sources of financing (domestic, international development funding, etc.)
Internal company or external financing
Energy costs and trends
Cost of clean-up
Allowance for uncertainties
PMaxson - Making the Business Case for Conversion

4. Factors to consider regarding conversion
Social
Corporate social responsibility, relations with stakeholders
Human health risks (workers, general public)
Environmental
Environmental impacts (emissions, releases)
Hazardous materials management, records
Hazardous waste disposal issues
Technical
[To be dealt with during other sessions]
PMaxson - Making the Business Case for Conversion

5. Highlights from “Cost of Conversion” (1)
Conversion to membrane brings benefits:
lower O&M costs (energy, personnel, maintenance, etc.)
high-quality caustic (and no mercury contamination)
no costs of handling, storing, reporting on mercury and mercury wastes (spills, sludges, accumulations...)
reduced cell footprint > increased capacity
overall lower cost per unit production of chlorine and caustic
non-economic benefits = environment, social, health
PMaxson - Making the Business Case for Conversion

6. Highlights from “Cost of Conversion” (2)
Conversion to membrane incurs costs:
Planning
Decommissioning and demolition
Downtime
Construction and process modifications
Site clean-up
Higher purity brine required
Lower chlorine quality
Likely concentration of caustic needed
PMaxson - Making the Business Case for Conversion

7. Making the business case
historically low interest rates
bilateral and multilateral funding opportunities
chance to expand capacity, modernize process flow and adapt to new market realities
from “Cost of Conversion,” depending on a great number of assumptions:
Up to 15 years payback time in a high-cost, highly regulated environment (e.g., EU)
As little as 5 years payback time in a lower-cost, more flexible environment (e.g., India)
PMaxson - Making the Business Case for Conversion

8. Current and future regulatory drivers
International agreements and obligations (Minamata Convention)
Federal regulations
State/local regulations
releases to water (Water Framework Directive)
Best Available Technology related regulations
mercury stocks monitoring and reporting
carbon pricing
PMaxson - Making the Business Case for Conversion

9. Disposition of mercury stocks
Virgin mercury
Storage cost
Sale or disposal cost
Recovered and excess mercury
Cost of cleanup before sale
Disposal cost
Three markets for mercury (US, EU, RoW)
PMaxson - Making the Business Case for Conversion