Price of mercury rising faster than gold
Posted 14th November 2010 by Kevin Telmer
The price of mercury has has hit a new high of $1,850/flask (76lbs) or $53.67/kg and the gold:mercury price ratio has dropped to 840 – see www.mercurywatch.org
Some part of the mercury price increase is likely due to increased demand from Artisanal and Small Scale Gold Mining (ASGM), which is booming, along with the price in gold, and is now the world’s largest demand for mercury. The forthcoming export bans by the EU (2011) and the US (2013), representing a future supply squeeze, may also be contributing to the price rise. The increase in the mercury price over the last year (almost tripling from $650/flask to $1,850/flask) has actually outpaced the rise in gold prices making the relative cost of using mercury to extract gold higher. The gold:mercury price ratio is an indicator of the relative cost of using mercury to extract gold.
Overall, the price increase makes mercury more expensive for uses, legal or illegal, and will, to some degree, be an incentive for increased conservation and recycling or switching to non-mercury alternatives. However, a higher price may also stimulate increased trade and production (legal and illegal) while significant demand exists. For marginalized Artisanal and Small Scale Gold Mining communities, an increased price will likely lead to increased conservation, recycling and alternatives where feasible, but can also have negative effects on their income and on the nature of their business relationships (more blackmarket, less ethical) – undesirable outcomes. For these communities a positive path forward is to minimize mercury demand (use) through access to better practices, policies, governance, and alternatives. Although there are some efforts to do this underway, they are few.
It is interesting to consider what the price of mercury in the future will signify. Perhaps, ultimately, it will be an indicator of successful global management of mercury. If the demand for mercury is successfully reduced, the price, illegal trade, production, and emissions will all diminish.
As well, It may be that for much of the world, reducing demand for mercury (and hence price) is a necessary prerequisite for effective collection and disposal of mercury already in circulation, mercury that will be recovered from contaminated sites and wastes such as mine tailings, and for preventing new virgin mercury production. If demand and price continue to rise, mercury that should be going to disposal sites may often be sold for use instead. The simultaneous ratcheting down of both supply and demand is therefore a requirement for successful management.