US embassy cable - 05MADRID504

UNCLAS SECTION 01 OF 03 MADRID 000504 
 
SIPDIS 
 
DEPARTMENT FOR OES/ENV (JOHN THOMPSON) AND EUR/WE 
 
E.O. 12958: N/A 
TAGS: SENV, AORC, ETRD, PREL, SP, Other 
SUBJECT: SPAIN ON MERCURY ISSUE AT UNEP GOVERNING COUNCIL 
 
REF: SECSTATE 18970 
 
1.  SUMMARY:  As the world's leading producer of mercury, 
Spain has an economic interest in working with the U.S. on 
our partnership approach to mercury control.  But it is not 
clear if Spain's economic interests will outweigh the logic 
of accepting an EU consensus position that perhaps moves more 
aggressively to curb mercury trade than Spain would optimally 
prefer.  However this issue plays out, Madrid's mercury 
policy will remain heavily influenced by its desire to 
gradually wind down domestic mercury production without 
causing major economic or social dislocations.  END SUMMARY. 
 
2  ESTHOFF made reftel points February 8 to Environment 
Ministry Director General for Environmental Quality and 
Evaluation Jaime Alejandre Martinez, urging Spain to support 
the U.S. mercury draft decision document at the February 
21-25 Nairobi meeting of the UN Environment Program (UNEP) 
Governing Council (GC).  ESTHOFF also stressed U.S. concerns 
about calls for a legally binding instrument for mercury 
control, underscoring our view that specific targeted mercury 
partnerships were a better way to proceed. 
 
3.  Alejandre, who said he would be accompanying Spanish 
Environment Minister Cristina Narbona to Nairobi, opened his 
comments by noting that the Spanish state-owned "MAYASA" 
company was the world's largest producer of mercury and that 
Spain has been the global leader in mercury production since 
the days of the Roman Empire.  Alejandre indicated he would 
be meeting with MAYASA executives, prior to the Nairobi UNEP 
GC, to discuss Spain's international mercury policy. 
Concerns related the economic viability of MAYASA and its 
roughly 150 employees engaged in the mercury trade (mostly at 
a facility near the Castilla La Mancha city of Cuidad Real) 
form part of the prism through which Madrid views possible 
international action on mercury regulation. 
4.  Alejandre noted that MAYASA was now diversifying away 
from mercury production and has not mined new ore since 2002 
(relying on existing ore stocks to continue to extract 
mercury).  MAYASA's most significant mercury contract is with 
"EUROCHLOR" (for use in Chlor-Alkali facilities).  This 
contract requires MAYASA to supply fixed amounts of mercury 
through 2011. 
 
5.  Alejandre said two dates/deadlines were driving Spanish 
and EU mercury policy.  First, the EU had agreed to stop 
mercury exports to non-EU countries by 2011 (the same year 
MAYASA's contract with EUROCHLOR expires).  Intra-EU mercury 
exports would still be allowed.  Second, all mercury exports 
(including the intra-EU trade) would be halted by 2020. 
 
6.  Alejandre stressed that Madrid would advocate a common EU 
position on mercury that would complement broader 
international mercury control efforts.  This common position 
should ensure that any possible Spanish commitment to 
eventually eliminate mercury production would not simply 
result in this market being ceded to other leading producers 
like Algeria or Kazakhstan.  It would not make sense to 
sacrifice MAYASA unless it were in the context of a broad 
international effort to halt the production and use of 
mercury.  (Note:  Alejandre mentioned that Sweden has 
companies that have either invested in, or are interested in 
investing in, Kazakhstan's mercury production sector.  End 
Note) 
 
7.  When asked if the above signaled Spanish support for 
Nordic calls for the UNEP GC to consider a binding 
international mercury instrument, Alejandre said "that 
depends."  He suggested that Spain would oppose measures that 
would prevent Madrid from gradually winding down MAYASA's 
participation in the trade and finding alternative employment 
for the workers whose livelihood remains linked to mercury 
production.  Alejandre appeared wedded to the 2011/2020 
dates, suggesting that Madrid could support a binding 
international instrument that hewed closely to the EU's plans 
to halt the trade by 2020.  In the meantime, he indicated 
that Spain might be open to several of the partnership 
concepts broached in the U.S. draft decision paper. 
 
8.  COMMENT:  As the world's leading producer of mercury, 
Spain has an economic interest in working with the U.S. on 
the partnership approach.  But it is not clear if Spain's 
economic interests will outweigh the logic of accepting an EU 
consensus position that perhaps moves more aggressively to 
curb mercury trade than Spain would optimally prefer.  If 
there is EU consensus to pursue a legally binding instrument, 
Madrid will almost certainly advocate an instrument that: 
(1) gives Spain time to gradually wind down MAYASA's mercury 
production, and, (2) includes the world's other leading 
mercury producers. 
MANZANARES