Global silver mine production dipped in 2023 due to halt at Mexican mine

Global silver mine production slipped 1% to 830.5Moz in 2023, mainly due to a weaker performance in Mexico, according to the World Silver Survey 2024, released by The Silver Institute. 

“Output was significantly affected by the four-month suspension of operations at Newmont’s Peñasquito mine in Mexico following a labor strike. Mexico’s silver output fell by 5% to 202.2Moz,” according to the report. 

“In addition, lower ore grades and some mine closures negatively impacted production in Argentina, which experienced a 4.9Moz drop in production, Australia at -3.1Moz, and Russia at -1.4Moz,” the text adds.

However, these losses were somewhat mitigated by increased supply from Chile at +10.1Moz and Bolivia at +3.8Moz.

Last year, Mexico was the leading silver mining country, followed by China, Peru, Chile and Bolivia, the Silver Institute said. 

“Silver recycling, which accounted for 18% of total supply last year, grew by 1% to 178.6Moz. Much like 2022, the industrial sector was the primary driver of volumes, which in turn was due to growth in the recycling of EO [ethylene oxide] catalysts,” it said. 

The Silver Institute expects this year to be a solid one for total silver demand, which is forecast to grow by 2%. “Industrial fabrication should post another all-time high, rising by 9%, propelled by an anticipated 20% gain in the PV market and healthy offtake from other industrial segments. Jewelry and silverware fabrication are predicted to rise by 4% and 7%, respectively, while bar & coin demand is forecast to contract by 13%.”

In 2023, total silver demand declined by 7% to 1,195 Moz, but this was coming from a record 2022.

“The price-sensitive physical investment, jewelry, and silverware sectors mainly contributed to last year’s drop. In sharp contrast, industrial demand hit another record high, led by the electrical and electronics sector, which grew 20% to 445.1Moz last year,” The Silver Institute said. “This gain reflects silver’s essential and growing use in PV [photovoltaic], which recorded a new high of 193.5Moz last year, increasing by a massive 64% over 2022’s figure of 118.1 Moz,” it added.

Outlook for 2024

The Silver Institute expects total silver supply to decrease by 1%. “As a result, this year, we will also see another large deficit for silver, amounting to a projected 215.3 Moz, the second-largest market deficit in more than 20 years.”

As outlined in the survey, silver has many new demand opportunities beyond its traditional applications and expanding role in the energy transition. For example, silver will become indispensable as artificial intelligence (AI) rises. 

According to the institute, end uses expected to incorporate silver in AI include transportation, nanotechnology, biotechnology, healthcare, consumer wearables, computing, and energy in data centers.

Finally, the average silver price grew by 7% in 2023, and as of April 12 this year, it had risen 30% since the beginning of this year. As a result, the gold:silver price ratio fell below 82:1, its lowest since early December 2023.

The Silver Institute has published an annual report on the global silver market since 1990. London-based independent precious metals consultancy Metals Focus independently researched and produced the 34th edition of the World Silver Survey for the Silver Institute.