1. Excess Mercury in Latin America and the Caribbean, 2010-2050* Latin America and Caribbean Mercury Storage Inception Workshop Organised by UNEP Chemicals, BCCR, LATU and the Zero Mercury Working Group Montevideo, Uruguay – 22-23 April 2009 Peter Maxson Concorde East/West Sprl - Brussels *Based on the report, Excess Mercury Supply in Latin America and the Caribbean, 2010-2050, UNEP, April 2009

2. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 2Objectives Estimate future mercury supply and demand in Latin America and the Caribbean Show how the “natural” balance between mercury supply and demand evolves Establish a “baseline situation” to see the effects of mercury supply reduction/storage decisions

3. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 3

4. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 4 Key sources of data “Mexican Mercury Market Report,” Commission for Environmental Cooperation, 2008. “National Program for the Integral Management of Mercury in Chile,” 2007, and “Pilot Project on Strengthening Inventory Development etc.,” 2008, Comision Nacional del Medio Ambiente, Government of Chile. “Pilot Project on Strengthening Inventory Development etc.,” Ministerio del Ambiente, Government of Ecuador, 2008. “National Emissions Inventory of Mercury in Panama (Summary),” Panama National Environmental Authority, Department of Environmental Quality Protection, 2009. “Report on the major mercury ‑ containing products and processes, their substitutes and experience in switching to mercury-free products and processes,” Lowell Center for Sustainable Production, 2008. “Summary of supply, trade and demand information on mercury,” UNEP, 2006. “The challenge of meeting mercury demand without mercury mining: An assessment requested by the Ad Hoc Open-Ended Working Group on Mercury,” UNEP, 2008. “Mercury-Containing Products Partnership Area Business Plan,” UNEP, 2008.

5. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 5 LA&C mercury sources, 2005 “Source” Mercury “produced” (tonnes) Mercury mining and/or processing of mine tailings ~30 Decommissioned chlor- alkali facilities unknown By-product mercury - zinc0 By-product mercury - gold~150 Recycled Hg from products3% of 140-215

6. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 6 LA&C mercury supply, 2010-2050 “Source”Evolution 2010-2050 Mercury mining and/or processing of mine tailings 30-40 tonnes/yr., decreasing as regional demand decreases Decommissioned chlor-alkali facilities 1,480 tonnes of Hg from decommissioned Hg cells becomes available during 2010- 2025 By-product mercury - zinc 80 tonnes/yr. by 2015 and 120 tonnes/yr. by 2020 By-product mercury - gold 150 tonnes increasing to 200 tonnes/yr. by 2015 Recycled Hg from products 10% of consumption by 2020, and 25% by 2040

7. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 7 LA&C mercury supply, 2010-2050 By-product mercury (zinc and gold ores) Chlor-alkali Other sources, esp. mercury mine tailings and recycling

8. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 8 LA&C mercury consumption, 2005 South America C. America & Caribbean LA&C total min.max.min.max.min.max. Small-scale gold mining1503001530165330 Chlor-alkali production20405152555 Batteries10155101525 Dental applications405020256075 Measuring and control202510153040 Lamps5105 20 Electrical and electronic5105 20 Other * 1020515 35 Total26047070130330600 * “Other” applications include uses of mercury in pesticides, fungicides, catalysts, paints, chemical intermediates, laboratory and clinical applications, research and testing equipment, pharmaceuticals, cosmetics, traditional medicine, cultural and ritual uses, etc.

9. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 9 LA&C mercury consumption, 2010-2050 ProcessesAssumptions regarding future consumption* Small-scale gold mining Reduce mercury consumption in small-scale gold mining globally by 50% over the next 10 years, with a subsequent decline after that of 5% per year. Chlor-alkali production Assume no new mercury cell facilities will be constructed. Assume mercury cell capacity will be gradually phased out between 2010 and 2022. ProductsAssumptions regarding future consumption* BatteriesAssume a 75% decrease in mercury consumption by 2015, and the remaining demand phased out gradually thereafter until 2025. Dental applications Assume a 15% reduction by 2015, and a gradual reduction thereafter to 50% of present consumption by 2050. Measuring and control devices Assume a 60% reduction of mercury consumption by 2015, the phase-out of mercury fever thermometer and blood pressure cuff manufacturing by 2017, and the phase-out of remaining demand by 2025. LampsAssume 20% reduction by 2015 and gradual reduction of 80% overall by 2050. Electrical and electronic Assume gradual 55% reduction of mercury consumption by 2015, and a gradual reduction thereafter to 2050. Other applications Assume a gradual 25% reduction of mercury consumption by 2020, and another 50% by 2050. * For future projections, see the UNEP Partnership Business Plans.

10. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 10 LA&C mercury consumption, 2010-2050 Products and other applications ASGM Chlor-alkali

11. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 11 Key assumptions for “Base Case” Scenario Consider LA&C as a single closed region Consider only regional sources and uses of mercury No exports from or imports to the region Mexico continues to produce a modest amount of mercury from small mines and tailings Gradual increase in mercury recovered as a by- product from regional gold and other mining operations Gradually increasing recovery of mercury by major non-ferrous metal smelters.

12. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 12 “Base Case” Scenario (mercury supply minus demand)

13. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 13 Observations about the “Base Case” Scenario LA&C regional supply-demand equilibrium about 2013 Accumulated excess of >8,000 tonnes of mercury from 2013-2050 However,… is it reasonable to assume that by-product mercury from industrial gold mining will stay in the region?

14. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 14 Assumptions for “Minimum Storage” Scenario Same basic assumptions as for “Base Case” Scenario, except: –150 t/yr by-product mercury from gold mining is exported (to the U.S.) or stored (in LA&C or in U.S.) –Less mercury is recovered from zinc smelting than previously assumed

15. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 15 “Minimum storage” Scenario (mercury supply minus demand) Exported/sequestered by-product mercury from large gold mines Excess mercury

16. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 16 Observations about the “Minimum Storage” Scenario LA&C regional supply-demand equilibrium is reached at about 2019 Accumulated excess of ~2,000 tonnes of mercury from 2019-2050 (plus >5,000 tonnes by-product of industrial gold mining?)

17. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 17 Reflections - 1 What happens when mercury is stored? Users think about product or process alternatives Suppliers think about diverse sources Mercury price increases Everyone thinks about ways to use less

18. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 18 Reflections - 2 Two main ways to influence mercury supply/demand: 1. “Demand management” = Take measures to reduce uses of mercury, for example through product legislation, and assume the mercury supply will decrease because demand decreased 2. “Supply management” = Reduce the supply of mercury, for example by storage, in order to influence mercury price and availability, thereby encouraging reduced demand

19. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 19 Reflections - 3 Is there a preference for managing mercury supply compared to managing demand? Both approaches can work in parallel for many sectors Some sectors may be more responsive to “supply management,” particularly: –if the activity may not be legal, –if it is difficult to enforce legislation, or –if the activity is highly decentralized (small-scale gold mining)

20. P. Maxson - Concorde East/West Sprl - Brussels - concorde.ew@tele2allin.be - 22 April 2009 Slide 20Comments Please send all comments (up to 15 May) to: UNEP Mercury Programme – DNarvaez@chemicals.unep.ch P. Maxson – at concorde.ew@tele2allin.be