Asian Metal: Hi, Mr. Zhao. Thank you very much for accepting Asian Metal's interview. We understand your company specializes in various mercury products. Please could you first of all introduce your company and development direction?

Zhao: Guizhou Silver Star Group mainly produces mercury-based chemical products, like mercury metal, mercury chloride and mercury catalysts, and also has a business producing antimony and recycling mercury catalysts, as well as other supplementary mercury-containing waste material. Currently our company mainly produces mercury catalysts, with capacity for 30,000tpy, and sales volume in 2012-2013 of about 7,000t, occupying more than a 50% market share.

Asian Metal: Mercury metal prices rose and then dropped sharply over the last year. What’s the main factor influencing the mercury metal price?

Zhao: The sales volume of mercury catalyst determines the price of mercury metal in the Chinese market. When the PVC industry is in a healthy state, mercury prices increase. Last year the highest price for mercury metal reached RMB730/kg VAT included, and this was because mercury mines in Xunyang had stopped production at the time, while many small mercury mines also halted operations due to environmental protection problems, added to which the Chinese government banned the importing of mercury metal. Thus, the supply was incapable of meeting demand and prices soared.

Asian Metal: Mercury metal prices dropped sharply from April 2014 but then picked up strongly from the beginning of June. What’s the main reason for this?

Zhao: There was a large volume of mercury metal stocks in the spot market at the end of last year, and the PVC industry performed weakly early this year, so mercury metal prices dropped sharply. Most Chinese PVC plants reduced production in Q1, 2014 and some even cut 70% of capacity. Furthermore, market participants were in a hurry to clear out stocks to avoid further losses when prices were in a downward trend. Thus, the mercury metal supply became excessive in the spot market and prices decreased to RMB370/kg VAT excluded. More recently, PVC prices have picked up slightly and some small mercury metal producers have stopped production due to strict environmental protection policies, so the supply of mercury metal has shrunk with prices rebounding to RMB410-420/kg VAT excluded.

Asian Metal: So what do you think about the future market for mercury metal?

Zhao: I estimate that mercury metal prices are likely to pick up further, and this uptrend will last three months into August, when prices are likely to decrease. This is because our group’s output of mercury metal will increase a lot when production lines for recycling and antimony-mercury separation are put into normal production. However, I suspect mercury prices cannot decrease too much and RMB360-370/kg VAT excluded would seem to be the bottom level, as mercury producers will stop production if prices decrease any further.

Asian Metal: How is the mercury catalyst business going currently?

Zhao: Dalong Silver Star has a capacity of 12,000tpy for low mercury content catalysts, 600tpy for mercury chloride and 10,000tpy for antimony. In the case of raw materials, we have invested in mercury-antimony ore, whose mercury content is about 1%, while the technology for separating mercury from antimony has only been mastered by Silver Star Group in China and our recycling rate is capable of reaching 90%. Thus we have an output of 100tpy of mercury metal from this side of the business.

Xinjiang Tuoyuan Chemical Co., Ltd. has a capacity of 10,000tpy for low mercury content catalysts, 300tpy for mercury chloride and 10,000tpy for waste mercury catalyst recycling. Now the project has been put into production, we sell mercury catalysts and recycle waste catalyst back, forming a circular economy.

Asian Metal: With environmental protection policies becoming more and more strict in China, while banning mercury is gradually moving up the agenda after the signing of the Minamata Convention, the mercury catalyst industry faces a grim situation. What, then, are your plans for the future business development of mercury catalysts?

Zhao: The direction of future development is based on low-mercury catalysts, which will reduce mercury consumption by improving technology. Moreover, it will make mercury prices more stable. Besides, we have identified the outcomes of using low-mercury catalysts.

Moreover, both the Dalong Gravity Technology and Xinjiang Tuoyuan Chemical plants are in the business of recycling mercury catalysts, while Dalong Gravity Technology also recycles slag etc. — reducing demand for primary ore and increasing supply by improving recycling rates. In future, the output of mercury from recycling in Silver Star Group is expected to be the No.1 in the world, reaching about 300-400tpy, which is equivalent to a large mercury mine.

Asian Metal: So what do you think about the influence on the mercury industry of the Minamata convention?

Zhao: Production and use of mercury will shrink gradually after the signing of the Minamata Convention, but the comprehensive recycling market will expand as environmental protection policies will be stricter in the future. So we will develop the mercury-oriented non-ferrous comprehensive recycling business.

Asian Metal: What is the scope for development of this business?

Zhao: Gravity Technology has a capacity of 56,000 tonnes for comprehensive recycling of mercury waste. There are two systems for recycling waste mercury catalysts and mercury-containing slag. We have now succeeded in recovering the selenium output, and next month other metals, such as rhenium and bismuth, will produce outputs.

Asian Metal: For comprehensive recovery, where do the raw materials come from? Which metals do you mainly get involved with? And what are the advantages in developing the scope of these activities?

Zhao: Recycled sources come from the nonferrous metals industry, including lead, zinc, copper and antimony smelters. We mainly focus on precious metals like selenium, gold, silver, antimony, bismuth, rhenium, indium and germanium. Gravity Technology is the first mercury-oriented comprehensive recycling company in China with the best environmental protection technology, and our recovery will be the largest in China in the future.

Asian Metal: Presently, there are many small factories recycling waste slag, but they have created a great deal of pollution. Does your company can also provide them with the relevant technical support?

Zhao: Certainly! Meiruite Technology Company, a subsidiary company of Silver Star Group, mainly focuses on the comprehensive ecological improvement of “waste water, waste gas and waste slag” from industrial factories and is engaged in environmental projects to harmlessly treat and repair heavy metal contaminated soils. We have now built cooperative relationships with many enterprises. We are still actively acquiring techniques and have sent personnel to study abroad.

Asian Metal: Thank you for your cooperation and we hope future business is booming!