GG - Top Silver-producing Countries
There are many factors to consider when looking at silver companies, from prices to management. However, investors should start with some knowledge of the global silver production landscape.
Knowing which countries produce the most silver can help investors understand the logic behind the exploration and development decisions that companies make. For example, high silver production in a particular country might indicate mining-friendly laws or high-grade deposits.
In 2018, world silver production increased marginally to 27,000 tonnes due to lower production from the world’s top silver-producing companies. Mexico was once again the world’s top silver-producing country, with nine others rounding out the list. Read on for a brief overview of those 10 nations. Silver production stats are based on the latest data from the US Geological Survey.
1. Mexico
Mine production: 5,600 MT
As mentioned, Mexico was the world’s largest silver producer last year — its output rose 240 MT from 2016 to hit 5,600 MT. The country is home to Fresnillo (LSE:FRES), one of the most productive silver companies in the world. Fresnillo extracts silver and gold at six different mines in Mexico, and has several other projects in various stages of development. Fresnillo is off to a good start in 2018, reporting a 14-percent increase in production in Q1.
Strikes were an issue in Mexico last year. Two men were killed while on strike at Torex Gold Resources’ (TSX:TXG) Media Luna mine in November, and 1,000 miners were reportedly on strike at a Durango-based mine formerly owned by Primero Mining earlier in the year.
It’s possible that these and other disruptions had an impact on Mexico’s overall silver production output in 2017. However, the outlook on Mexico’s 2018 silver production is generally quite positive, with experts forecasting that junior mining companies may enter the space to develop projects left behind by larger firms.
2. Peru
Mine production: 4,500 MT
Peru was the world’s second-biggest silver producer, putting out 4,500 MT in 2017; that’s up 400 MT from the previous year. Peru also features the world’s largest-known silver reserves, with 93,000 known MT of silver. The country has a massive amount of untapped silver potential that could allow it to move up the rankings in the future.
The majority of Peru’s silver production comes from the Antamina mine in Northern Peru. The mine is a joint venture between BHP Billiton (ASX:BHP,NYSE:BHP,LSE:BLT), Glencore (LSE:GLEN), Teck Resources (TSX:TCK.B,NYSE:TECK) and Mitsubishi (TSE:8058). While the mine produces more silver than any other in the country, it is primarily a copper mine, and silver is produced as a by-product.
Fortuna Silver Mines (TSX:FVI,NYSE:FSM) is rapidly growing its silver production with two operating mines, one of which is in Peru. That mine produced 0.9 million ounces of silver last year. In May 2018, Canadian mining company Bear Creek Mining (TSXV:BCM) said it might complete a Peruvian IPO to help finance its Corani silver project in the country. It’s predicted that Corani will “produce 11 million to 12 million ounces of silver once fully operational.”
3. China
Mine production: 2,500 MT
China ranked third in silver production in 2017. The Silver Institute attributes a large part of China’s rise in production in recent years to the country’s development of other mining operations — as of 2012, nearly 95 percent of Chinese silver production was a by-product of other mining projects.
Many companies in China are privately owned, but Silvercorp Metals (TSX:SVM) bills itself as the country’s largest primary silver producer. It has a portfolio of producing silver-lead–zinc mines in China, including the multi-mine Ying District and the GC mine.
4. Russia
Mine production: 1,600 MT
Russia’s silver output increased by only 30 MT last year, but losses in Chile and Australia allowed it to become the world’s fourth-largest silver-producing country in 2017. The country’s silver reserves are 57,000 MT, and it has been a top silver producer for many years.
The country’s largest silver producer is Polymetal International (LSE:POLY). Polymetal dominates silver production in Russia and operates four of the top five silver mines in the country. Last year, Polymetal produced 26.8 million ounces of silver, down 8 percent year-on-year.
Silver Bear Resources (TSX:SBR) produced the first silver at its Mangazeisky project in Russia in April. Mangazeisky covers an area of approximately 570 square kilometers and includes the high-grade Vertikalny deposit, which the company says is “amongst the highest-grade silver deposits in the world.”
5. Poland
Mine production: 1,400 MT
Poland rose from sixth place in 2016 to reach fifth place in 2017. The country’s 2017 silver production grew by 130 MT year-on-year to come in at 1,400 MT, outpacing Australia.
Poland-based KGHM Polska Miedsz (WSE:KGH) is consistently one of the world’s top silver-producing companies, according to the Silver Institute, and the company could expand to become larger. Poland is tied with Australia as having the world’s second-largest silver reserves after Peru.
6. Chile
Mine production: 1,200 MT
Chile is usually higher on the list of top silver production by country, but last year its output fell 300 MT, allowing Russia and Poland to outperform the Latin American producer.
Some believe the drop was partly the result of a labor strike at BHP Billiton’s Escondida mine. The country’s minerals ministry, known as COCHILCO, has also suggested that the fall was partially due to a sheer lack of silver found as a by-product of gold. This news came despite the fact that the country’s reserves are an estimated 27,000 MT. Time will tell if this downtrend continues.
7. Australia
Mine production: 1,200 MT
Mines in Australia churned out 1,200 MT of silver in 2017, a decrease from 1,420 MT in 2016. That decline positioned the country as the seventh-largest silver producer in the world. That said, silver mining has a rich history in Australia, and BHP Billiton began there as a silver operation in the 1920s.
Today, South32 (ASX:S32) operates the Cannington mine in Queensland, which produces more silver than any other mine in the country. The company claims to produce 6 percent of the world’s silver.
8. Bolivia
Mine production: 1,200 MT
Bolivia’s silver production also went down to 1,200 MT in 2017, a decrease of 150 MT from the previous year. However, there is room for the country’s silver industry to expand. Bolivia reportedly sold more than $2.3 billion in minerals to China in 2017.
Bolivia is home to several silver mines, particularly in its Potosi region. The San Cristobal mine, operated by Sumitomo (TSE:8053), features the third-largest silver reserves of any mine. In addition, Pan American Silver (TSX:PAAS,NASDAQ:PAAS) operates an underground silver-zinc mine in Bolivia called San Vicente.
Bolivia been in the spotlight on and off for the past several years for having children work in silver mines. But as Cesar Navarro, minister of mining and metallurgy, was quoted as saying in this video (20:45), the government is not monitoring mining activities, and therefore has “no control” over these labor issues.
9. Kazakhstan
Mine production 1,200 MT
Kazakhstan is a newcomer to the list of major silver producers. At 1,200 MT its output is on par with the major players, which is quite impressive for its first year on the list.
According to the US Geological Survey, silver reserves in Kazakhstan are currently unknown. That said, privately owned Kazzinc is finding plenty of silver. The company was established in 1997, and is primarily an integrated zinc producer. It claims that its annual silver output stands at 1,200 tonnes.
10. United States
Mine production 1,020 MT
In 2017, the US produced 1,020 MT of silver with an estimated value of US$564 million. Metal was produced at four silver mines and as a by-product at 36 base and precious metals mines. The country’s output decreased 11 percent from 2016, with the fall believed to be due to a strike at a primary silver mine. Low physical silver demand and low prices also contributed.
The largest US-based primary silver producer is Coeur Mining (NYSE:CDE). Coeur’s US projects are not silver focused, but the company does operate silver mines in South America and Australia.
Are these the 10 top countries for silver production that you expected? Which top silver-producing countries surprised you? Let us know in the comments below.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.