Silver is a non-renewable resource [1
] and one of the rarest metals of the earth’s crust (average 0.075 mg/kg), preceded only by a few others, such as gold and the six platinum group metals (PGM) [2
]. Its distinctive physical-chemical properties, its typical use as precious good and its many and unique industrial uses are well known, particularly in electrical and electronic equipment (EEE), as specialty catalysts and for strategic and modern high-tech applications [3
Summarizing the global situation of the silver market and its main dynamics, by the statistical information from the “World Silver Survey 2017” of the Silver Institute [4
], it is possible to highlight the following key-points: (1) from 2007 to 2016, the world mine silver production has continued to grow with an annual average rate of 3.2%, from 667.7 Moz to 885.8 Moz; (2) the trend of the physical demand, from 2010 to 2016, has essentially stabilized around 1000 ÷ 1100 Moz/year; (3) most recently, silver prices have significantly decreased: from 35.12 $
/oz, in 2011, to 17.14 $
/oz, in 2016; (4) the industrial supply from scrap, from 2011 to 2016, obviously followed the price dynamics, falling drastically from 260.1 Moz/y to 139.7 Moz/y. Clearly, a possible future rise of prices could increase the share of silver recovery from scraps and could make those deposits that are currently considered uneconomic to become of mining interest [5
Because it would be very difficult to analyze the situation regarding the future global availability of silver as a commodity in general, due to the necessity of a large amount of data which are hardly available, we have focused our research only on the production statistics of the most important primary silver mines in the world, investigating their exploitation state and historical trends. To do this, we have investigated and elaborated the corresponding quantitative information about the average silver grade of the extracted minerals of twelve of the world top fifteen leading primary silver mines, which represent the 54% of the worldwide primary silver production and 16% of the global silver mining production. It is interesting to investigate the production of primary silver, even if it is a small portion of global supply, in order to have an idea of the past and, probably, future variations of silver contents in those primary deposits that have got, as far as it is currently known, the highest silver ore grades on Earth. These mines are the only sites to produce silver as primary product while all the others, although having a considerable silver production, produce silver not as primary product, but as by-product of other minerals (gold, copper, zinc, etc.).
It must be made clear, by now, that our conclusions could not probably be general forecasts for the global silver mining production and, even less, for the future availability of this metal as commodity. In fact, to access the long term silver availability or exhaustion, it is necessary to include the assessment of the amount of silver from all potential geological resources (either as primary product or by/co-product from other mineral deposits). In addition, information and corresponding investigation about geological exploration of new silver mining fields is not included in this manuscript for the lack of data in the related companies’ reports.
According to the statistics of the Silver Institute and Thomson Reuters (“World Silver Survey 2017”), the first two silver producing countries in the world, in 2016, were Mexico and Peru, which together represent the 38% of the global silver production (885.8 Moz), while the only world primary silver production was 265.1 Moz and the biggest silver producing companies were Fresnillo plc. (Mexico City, Mexico) (45.7 Moz), Glencore plc. (Baar, Switzerland) (39.1 Moz) and KGHM Polska Miedź S.A. Group (Lubin, Poland) (38.8 Moz). Most of the silver produced in the world is obtained, however, as by-product of gold, copper, lead and zinc mining processes (620.7 Moz).
For the aims of this paper, we have referred to the world ranking of the first fifteen leading primary silver mines, published by the Silver Institute in its “World Silver Survey 2016” [6
]. Of these mines, we have considered the last decade’s production data—mostly derived from their respective companies’ annual reports—of the following twelve extraction sites: Saucito (Mexico) and Fresnillo mines (Mexico) of the Fresnillo plc.; Dukat mine (Russia) of the Polymetal International plc. (Limassol, Cyprus); Cannington mine (Australia) of the South 32 Ltd. (Perth, Australia); Uchucchacua mines (Peru) of the Compañia de Minas Buenaventura SAA (Lima, Peru); Pirquitas mines (Argentina) of the Silver Standard Resources Mining Inc. (Vancouver, Canada); Greens Creek (Juneau, AK, U.S.A.) of Hecla Mining Company (Coeur d’Alene, ID, U.S.A.); San Jose mine (Argentina) of the Hochschild Mining plc. (London, UK) and the McEwen Mining Inc. (Toronto, Canada); Arcata mine (Peru) of the Hochschild Mining plc.; San Bartolomé (Bolivia) and Palmarejo mines (Mexico) of the Coeur Mining Inc. (Chicago, IL, United States); and La Colorada mines (Mexico) of the Pan American Silver Corp. (Vancouver, Canada).
Due to the lack of statistical information or to the unavailability of their respective annual reports, it was not possible to analyze the production data of the following remaining three mining sites: Escobal mine (Guatemala) of the Tahoe Resources Inc.; Imiter mine (Morocco) of the Société Métallurgique d’Imiter and Gümüşköy (Turkey) of the Eti Gümüş A.Ş. It was also not feasible to use the production data contained in the annual reports of Gümüşköy mine (Turkey) of the Eti Gümüş A.Ş., because this information is mostly available in aggregate form.
In 2015, the last available year data available in the “World Silver Survey 2016”, the above twelve sites represented, with a total production of 142.6 Moz of silver, over the 80% of the mining production of the whole fifteen statistical sample; that was almost the 54% of the world primary silver production and the 16% of the global mine production.
Below, we briefly describe the analyzed mines, indicating the related information sources that we have used for our study.
The Fresnillo Saucito site (Zacatecas, Mexico), operational since 2009, is an underground mine with flotation plants. It is the current first primary silver mine in the world: in 2016, this mine produced 21.9 Moz of silver [4
]. The other site of Fresnillo plc., the Fresnillo mine (Zacatecas, Mexico), in operation since 1554, is an underground mine too [8
]. Its flotation plant has a milling capacity of 8000 t/d (2.64 Mt/y). In 2016, this mine produced 15.9 Moz of silver. For both Fresnillo’s company mining sites, the respective data sources have been the following: Fresnillo, “Production Report”, several years [9
]; Fresnillo plc., “Annual Report”, several years [10
The Dukat underground silver/gold hub (near the cities of Magadan and Omsukchan, in Magadan Region, Russia), of the Polymetal International plc., is the third largest silver deposit in the world. In 2016, this plant produced 19.8 Moz of silver [4
]. Production has started from 2000. The Dukat and Lunnoye operating units, located in the same geographic proximity area, created, in 2008, the Dukat hub. Dukat concentrator currently operates at full capacity of 1500 kt/d and uses conventional sulphide flotation technology. The corresponding statistical sources have been: Polymetal International plc., “Annual Report & Accounts”, several years [11
The Cannington site (Shire of Mckinley, Queensland, Australia), 100% owned by South 32 Ltd, is a Pb-Zn-Ag Broken Hill-type (BHT); it is an underground mine and a sulphide ore type. It has a surface processing facility and constitutes one of the largest ore reserves in the world. This deposit, discovered in 1990, has commenced concentrate production from 1997. In 2015, it was the second largest primary silver mine in the world with a production of 22.2 Moz. In 2016, this site produced 18.2 Moz of silver. The statistical sources have been the following: South 32 Ltd., “Annual Report 2015” and “Annual Report 2016” [12
]; BHP Billiton plc., “Annual Report”, several years [13
]; BHP Billiton, “Quarterly Production Report—June”, several years [14
]; St. Angelo [15
The Uchucchacua site (Lima, Peru), 100% owned by Compañía de Minas Buenaventura S.A.A., is an underground mine and produces, in order of economic importance, silver, zinc and lead. In 2016, this plant and the adjacent plant of Julcani produced 16.2 Moz of silver, with a high content of precious mineral in ore treated (474 g/t). These have been the related data sources: Compañía de Minas Buenaventura S.A.A., “Annual Report”, several years [16
The Pirquitas plant (Jujuy, Argentina), a 100% owned property of Silver Standard Resources Mining Inc., is an Ag-Sn-Zn underground and open-pit deposit. This site has been in operation since 2010. In 2016, silver mining production was 10.4 Moz. Its statistical information have been: Silver Standard Resources Mining Inc., “Silver Standard Report—Fourth Quarter and Year-End Results”, several years [17
The Greens Creek mine (Admiralty Island, Alaska, USA) of Hecla Mining Company, producing, in 2016, 9.3 Moz of silver, is a polymetallic (Ag, Zn, Au, Pb), stratiform, sulphide deposit. The data sources of this site have been the following: Hecla Mining Company [18
]; Hecla Mining Company, “Annual Report”, several years [19
The San José silver-gold plant (in Santa Cruz province, Argentina) is an underground operating site since 2007. It is a low sulphidation type, held in partnership between Hochschild Mining Argentina (51% ownership) and McEwen Mining Inc. (49% ownership) by the “Minera Santa Cruz, S.A.” (MSC) joint-venture agreement. In this site, in 2016, 6.7 Moz of primary silver were produced [20
]. The first production operations of the Arcata site (Department of Arequipa, Peru)—that covers an area of 47,000 hectares, currently 100% owned by the British-based Hochschild Mining plc.—started in 1961. This unit produces silver/gold bulk concentrate by flotation of minerals from underground operations [21
]. In 2016, silver production was 6.3 Moz. For both the San José and Arcata mines, the statistical sources have been: Hochschild Mining plc., “Annual Report & Accounts”, several years [22
]; Hochschild Mining plc., “Preliminary results for the twelve months ended 31 December 2016”, 8 March 2017 [23
]; McEwen Mining Inc., “Annual Report”, several years [24
Coeur Mining Inc. has two sites among the top 15 world largest primary silver mines: San Bartolomé (Potosì, Bolivia) and Palmarejo (Chihuahua, Mexico). The first one is a surface mining plant with a 2016 silver production of 5.5 Moz [25
]. The second site is a silver-gold complex with an underground mine, whose commercial production commenced in 2009. Palmarejo’s silver production, in 2016, was 4.4 Moz [26
]. For both sites, data sources have been: Coeur Mining Inc., “Annual Report”, several years [27
]; Coeur Mining Inc., “News release”, several years [28
La Colorada (Zacatecas, Mexico), 100% acquired by Pan American Silver Corp. in 1998, is a poly-metallic underground mine. The operation produces silver, gold, zinc and lead by milling approximately 870 t/d of sulphide ore and 430 t/d of oxide ore [29
]. 2016 production was 5.8 Moz. The corresponding sources of data have been: Pan American Silver Corp., “Annual Report”, several years [30
Of the twelve analyzed mines, we have extrapolated the production statistics concerning the following items: silver produced, ore processed, silver mill feed grade, silver average yield, reserves (proved and probable), resources (measured, indicated and inferred) and average ore grades in resources and reserves.
We have focused only on primary silver mines, excluding those sites that, although having a considerable silver production, produce silver not as primary product, but as by-product of other minerals (gold, copper, zinc, etc.), because, as we have already written in the introduction of this paper, it would be very difficult to analyze the situation regarding the global availability of silver in general, due to the necessity of a large amount of data hardly available. Specifically, a “primary silver producer” is a company generating most of its revenue from silver sales. In addition to this, we have chosen, for reasons of availability, homogeneity and statistical significance, to limit the reference temporal scale of all indicators to the last ten years: from 2007 to 2016.
Furthermore, the assessment of proven and probable resources (measured, indicated and inferred), of almost all twelve examined mining companies, is based on the recommendations contained in the Joint Ore Reserves Committee (JORC) “Australasian Code For the Reporting of Exploration Results, Mineral Resources and Ore Reserves” of “The JORC Code 2012 Edition” [31
]. As known, assessment of resources and reserves is important for the companies themselves and their investors to establish the production units’ depreciation and amortization of annual expenses [32
Other precious metals mining companies, like Coeur Mining Inc., that are listed in the Toronto Stock Exchange (TSX), report the amount of their mineral resources and reserves according to different requirements, based on the Canadian Securities and Exchange Commission (SEC) by the National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). The term “mineralized material”, used in the SEC’s Forms 10-K of Coeur Mining Inc., indicates those mineral deposits which are not ore reserves; this term is equivalent to JORC’s “proven” (or “measured”) and “probable” (or “indicated”) mineral resources together.
Lastly, as the “silver average yield” indicators are not always available in the companies’ yearbooks, it has often been necessary to determine them indirectly by dividing silver produced amount (“mine production”) by the tonnes of extracted ore (“ore milled” or “ore processed” items). Likewise, for an easy and homogeneous comparison, it has been necessary to multiply the silver mill feed grade (in ore treated), of each mine, by the corresponding tonnes of ore milled or processed. The related values of all the mines considered have been summed and then cumulatively divided by the total amount of milled or processed ore. This synthetic coefficient represents the average silver content of the treated mineral for all sites.