Mexico Continues to Be the World’s Leading Silver ProducerBy Paloma Duran | Wed, 06/16/2021 - 15:37
Mexico continues to be the world´s top silver producer, despite challenges caused by COVID-19. Industry stakeholders are optimistic that 2021 is will be a better year for silver production, especially as its industrial demand continues to grow in the coming years.
In 2020, Mexico had a total silver production of 5,541 tons, followed by China with 3,443 tons, Peru with 2,991 tons, Bolivia with 1,589 tons and Chile with 1,474 tons. Global production totaled 25,516 tons, representing a 3.7 percent decrease compared to a 2019 production of 26,500 tons.
Meanwhile, Mexico reported a 9.5 percent drop in silver production compared to 2019 silver production figures totaling 5,840 tons, the World Bank reported. However, this is mainly due to the COVID-19 pandemic that affected global demand and its two-month suspension, where mining companies had to stop production and other mining activities in order to follow Mexican authorities´ sanitary protocols.
According to Global Data, after years of annual decline, world silver production is expected to increase 8.1 percent in 2021 to 918.3Moz and in 2024 to 1 billion oz, representing a which would 3.2 percent increase every year. Mexico, Peru and China will be the key producing countries, which together are expected to produce 393.9Moz in 2021 and 443.9Moz in 2024.
Michael DiRienzo, Executive Director of SI told MBN that Mexico is expected to have solid growth as new projects such as Cerro Los Gatos, Juanicipio and Capela improve production rates. "We believe that 2021 and later years will be very good for Mexico."
Silver price during 1Q21 rose 8 percent, which is its highest level in 8 years and was 60 percent higher than its 1Q20 records. According to the World Bank’s Commodity Market Outlook, the price increase was due to a higher demand for silver in industrial use.
According to the SI, silver is expected to be the metal to benefit the most from emerging industrial applications. The he Silver Institute´s Market Trend Report explains that silver has the highest electrical and thermal conductivity of all metals, making it an essential industrial metal. In addition to its importance for electronics, the metal is widely used in photovoltaic (PV) cells.
Silver will also benefit from green energy trends that are being supported by carbon emissions legislations and the increased acceptance of renewable energy due to its lower costs., “Silver is truly a green metal and it is playing a vital role in the decarbonization of societies," said DiRienzo during MMF21. He added that since Mexico is the largest silver producer, the country will play a fundamental role in the decarbonization of the industry.
Between 2021 and 2030, PV manufacturers are expected to consume 888Moz of silver, 51.5Moz more than the total production of the world's silver mines in 2019, according to Forbes. Other technologies like 5G will also drive a higher demand for silver in order to produce semiconductor chips, cabling, microelectromechanical systems (MEMS) and Internet of Things systems, among others. According to data from the Precious Metals Commodity Management, in 2019 these goods used around 7.5Moz of silver. For 2025, this is expected to increase to 16Moz, probably reaching 23Moz by 2030.