Michael DiRienzo
Executive Director
The Silver Institute
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View from the Top

Silver To Pick Up In Long Term Despite Price Stagnation

Mon, 10/22/2018 - 10:41

Q: What are the main elements driving the demand for silver globally and how is Mexico adapting to these trends?
A: Silver will be mined forever. Typically, silver is a byproduct of other mining activities, with only nearly 30 percent coming from a primary silver mine. When miners are mining for gold, lead, copper, zinc or other minerals, often silver is in the ore body. The world needs silver, especially for industrial activities. As the world becomes less reliant on fossil fuels for energy, already we are seeing new opportunities for silver in photovoltaics and hybrid and electric cars. We just released a report titled “The Role of Silver and the Green Revolution,” which outlines the future of silver in these technologies.
In terms of Mexico’s role, the country has been at the forefront of mining for centuries. It will continue to lead the way in implementing new innovative and safe, clean mining techniques. Mexico has the infrastructure, personnel, experience, and most importantly, the silver reserves to maintain its top spot for many years to come.
Q: Identifiable investment fell by 40 percent in 2017, the lowest level since 2007. How is this expected to affect the silver market?
A: This in my opinion, and many others', is the primary reason why we are seeing prices at these low levels. The investment side of the silver equation is not where it once was. Using the US as an example, it currently has low unemployment and 4 percent GDP growth coupled with a very strong stock market. This means that few people see the need to turn to hard assets as an investment. So, while prices of the metal are not as expensive as they once were, we do see a recovery down the road, from value buyers and especially if and when the economy starts to falter.
Q: How does the World Silver Survey benefit the industry and what is your assessment of its progress almost 30 years after its first edition?
A: The World Silver Survey is considered by most silver market participants and experts as the best source of annual data on the silver market. It is comprehensive, extensive and continues to evolve to provide the information that most want to see today. Its insights serve as a blueprint of data on many key aspects of the industry where all readers, including Mexican silver operators, can draw guidance on past and future trends in the market. We have installed a World Silver Survey library on our website where anyone can download the current and all previous editions at no cost.
Q: What must miners know about the importance of promoting public understanding and how far is there a focus on changing negative perceptions of mining?
A: This is a story that we promote at the institute. The story of silver is unique as it is the most used precious metal in industry, last year consuming nearly 600 million ounces and posting its first increase since 2013. Everything we as consumers touch electronically essentially has silver inside. From our cars, homes, offices, technology and increasingly in healthcare, all is made better by silver.
We have just initiated a Silver Sustainability Program at the Institute. In early 2019, we will roll out an industry platform outlining our members’ commitment to responsible mining practices, such as good neighbor partnerships, and other initiatives. We will augment this with a media campaign and a website solely devoted to our program.