Another factor is rising global demand for compact fluorescent lamps that are believed to be energy efficient. It takes 2 to 5 milligrams of mercury to make one of these light bulbs. Consumers in the European Union will be compelled to buy energy-efficient light bulbs from 2012.

The region of Wan Shan, or Ten Thousand Hills, accounted for 60 per cent of China's mercury output in recent decades and helped the nation to repay much of its debt to the Soviet Union.

Workers of Hengjia Mining Limited are now busy pumping out water from a mine in Fangjiatun, a township of Xinhuang, so that production can resume. Their supervisor, who declined to give his full name, said the company was optimistic that mercury prices would rise further.

'Prices are going up fast. If we are lucky and strike mercury ores soon, we'll make a fortune,' he said.

The Fangjiatun mine first opened in 2003 but closed last year when mercury prices fell to as low as US$500 per flask. Water flooded parts of the idle mine, about 700 metres deep. Huang said the company planned to dig deeper and begin production in four or five months.

Zhong Yongfu, a Guizhou businessman who has acquired from the government the mining rights to a site in Wan Shan, is eager to cash in.

'Based on the current mercury prices, my mine is worth more than 200 million yuan (HK$228 million),' Zhong, boss of Jinxing Mining, said.

Mercury ores were detected under the site in Gaolouping township in the late 1980s but have remained in the ground due to difficulties, he said.

Zhong said he was looking for a partner with technological know-how to start mining.

Mercury trader Howard Masters of London-based Lambert Metals International said the surge in mercury prices was due to mines being closed in western countries to reduce the toxic element in circulation.

'Demand has been strong and steady for a long time but supply is being cut off with most mines closed,' he said.

Europe will ban mercury exports from March next year, while the US will ban exports in or before 2013. Large Spanish mines closed about three years ago. The European Commission said in 2008 that the ban was to cut the global supply of mercury and limit emissions of the toxic metal into the environment.

Masters said demand for mercury was partly driven by gold mining in countries like China, India, Indonesia and South Africa. On Thursday, 200 flasks were sold through Lambert at US$1,050 each.

The use of mercury to extract gold is toxic to both human health and the environment, but soaring gold prices have seen such use continuing around the world.

Mercury mining in Wan Shan began as early as the Tang dynasty (618-907 AD). The region became widely known as China's 'mercury capital' in the middle of the 20th century as its reserves ranked it at No 1 in Asia and No 3 in the world.

The 1960s saw rampant mining as China repaid much of its debt to the Soviet Union amid worsening relations. At its peak, Wan Shan's mercury output exceeded 1,300 tonnes a year and the central government in 1966 made the area the first county-level special administrative region.

The sun set on the mercury capital in 1990s with its reserves depleted. Between 1990 and 2000, the poorly managed public mining company of Wan Shan lost 177.7 million yuan even after government subsidies. It went bankrupt in 2002 and the mercury reserves gradually fell into private hands.

Environmental concerns in recent years prompted the central government to discourage private mercury mining in Guizhou and Hunan, but small mines in Wan Shan have operated intermittently, driven by poverty and market demand.

Many residents in Wan Shan suffer from mercury poisoning, showing symptoms such as headaches, quivers, bleeding gums, vertigo and psychological disturbances.

Wu Yangchun, 77, who operated a drill in Wan Shan's public mine from the 1960s to the 1980s, was diagnosed with mercury poisoning about six years ago. She suffers tinnitus, a shaky hand, frequent fevers and oral cavity problems.

'My mouth trembled and I couldn't eat. Only after I began to take pills was I able to have normal meals,' Wu said.

Asked whether she regretted working in the mine, Wu shook her head and cited the need to help the country repay its debt. 'We contributed to the repayment of debt to the Soviet Union. It was my responsibility to work when the country needed me,' she said.

The mercury concentration in rice, corn and vegetables grown in Wan Shan is far above levels deemed safe by the World Health Organisation, according to a 2004 report by environmental researcher Qu Liya, who later became Guizhou's deputy environmental chief.

Between 1994 and 2004, 745 tonnes of mercury vaporised into the air, 40 tonnes went into rivers and 450 tonnes was ditched among waste residue on land in Wan Shan, according to another report by Qu and other researchers published in 2004.

More than 10,000 residents face a direct threat from five large slag heaps upstream from them, according to a report by the State Administration of Work Safety published in May last year. The report said cleaning up the five heaps would cost 111.3 million yuan.

After the collapse of the public mining company, rough private workshops set up to extract mercury have caused havoc to people's health and the environment. Thick smoke belches from the workshops and workers rarely wear protective gear.

The official line is a little different.

Wu Chenglong, a director of Wan Shan's Bureau of Land and Resources, said mercury mines no longer operated in the county. 'Production has stopped. There are few reserves left,' he said.

Qu, deputy environmental chief of Guizhou, also said she was unaware of any mercury mining in Wan Shan. She said the Guizhou government was doing its best to repair the environmental damage caused by mercury mining.

It's ancient wisdom not to drink poison to quench your thirst. But a region as destitute as Wan Shan may find it hard to reject poison as a way out of poverty.

In 2008 the region had a GDP per capita of 6,824 yuan, just 30 per cent of the national average, according to the Wan Shan government's website.

To revive its economy, Wan Shan plans to encourage mining of potassium, vanadium and manganese, develop a mercury-related chemical industry and promote tourism, according to the website.

In March last year the State Council listed Wan Shan among 44 'resource-depleted cities' that are entitled to financial aid to help them find new growth models.

Global mercury resources are estimated at 600,000 tonnes, mainly in China, Italy, Kyrgyzstan, Russia, Slovenia, Spain and Ukraine, according to the website of London-based Minor Metals Trade Association. Only about 120,000 tonnes are considered recoverable.

Wan Shan has about 4,000 tonnes of mercury resources, said Liu Yong, a department head of Wan Shan's Bureau of Land and Resources.

Ron Hui Shu-yuen, professor of electronic engineering at City University in Hong Kong, said it was ironic that the use of 'green' light bulbs indirectly led to environmental damage in places like Guizhou.

'The compact fluorescent lamp is one of the best examples that green products can be polluting,' Hui said.

'Those who claim that less energy is consumed in the use of compact fluorescent lamps have forgotten to include energy components in mining, manufacturing and cleaning up the mess after use.'

He said light emitting diode lamps were a better alternative.

Albert Lai Kwong-tak, director of the Conservancy Association in Hong Kong, said while the use of compact fluorescent lamps should continue, a certification system was needed to help consumers learn whether the mercury in the lamps came from environmental sources.

'This way consumer power can come into play and manufacturers will be pressured to select good sources,' he said.

Massive unemployment followed the closure of the public mine, Wan Shan's economic pillar. Toxic and polluting as small private mines may be, they promise many a way out of poverty. Now it faces a choice: drink more poison or find a new way to quench its thirst?

Liquid assets

The price of mercury has shot up. Last year a flask (34.5kg) of the metal sold for US$600

In the past week the price (in US dollars) reached topped: $1,000