Silver Mining Industry Faces Challenges Despite Soaring Demand

Researched by Industrial Info Resources (Sugar Land, Texas)--For centuries, silver has held immense value as a versatile commodity and has found applications across various domains such as currency, jewelry, medicines, photographic films and utensils. However, in today's world, silver is evolving beyond its role as a symbol of wealth to becoming a key component in green-energy transitions and technological advancements.

According to a recent report by the Silver Institute (Washington, D.C.), global demand for silver is projected to reach 1.2 billion ounces this year and would be the second-highest level recorded, if achieved. A rise in industrial fabrication, smart gadgets like phones and laptops, photovoltaic installations, batteries for electric vehicles and jewelry has fueled the demand for this white metal. Rising gold prices have also prompted an increase in investments in silver as a safe-haven asset.

Despite the growing demand for silver, the industry is currently facing supply challenges. Two major silver producing countries, Mexico and Peru, saw lower output, which will lead to a 2% decline in global mined silver production for 2023. Operational disputes and labour strikes like those at the Lucky Friday mine in the U.S. and Newmont's Peñasquito mine in Mexico have also hampered silver production globally. Additionally, as silver is found in a combination with other metals such as zinc and copper, any price fluctuations affecting these byproducts could potentially hinder mining activities for silver in the future.

Industrial Info is tracking 137 capital-spending projects worth about US$10 billion that are geared toward silver mining from ores. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a full list of related project reports.

Most of the projects are in the planning phase with a majority of them (83) of them facing a kickoff slippage of more than two years. This not only adversely affects project costs and timelines, but also undermines stakeholder confidence.

North America is the biggest driver of investment and owns about 71% of the market with an investment value of around US$7 billion across 70 projects. It is followed by South America, with around US$2 billion across 44 projects, and Asia with around US$696 million.

By country, the U.S. leads the way with a total spend pipeline of approximately US$3 billion across 16 projects. It is followed by Canada with about US$2 billion across 17 projects. Investments worth a combined US$3 billion are being tracked out of Mexico and Peru. Other countries with significant investments include Morocco, Australia, China and Argentina.

With a combined project spending of more than US$3 billion, Hecla Mining Company (NYSE:HL) (Coeur d'Alene, Idaho), South32 Limited (Perth, Australia), Bear Creek Mining Corporation (Vancouver, Canada) and BMC (UK) Limited (London, England) are the top players in the market and own a cumulative market share of about 33%.

Going further, increasing investments in renewable projects and electronics is likely to boost silver prices and demand in the future. Increased automatic and technological innovations in robotics and artificial intelligence is anticipated to make extraction of silver safe and efficient. As the silver industry navigates through challenges, the future trajectory of these projects remains to be seen.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).