Silver futures prices moved higher again on Friday with July delivery contracts exchanging hands for $17.38 an ounce as the metal continues to claw back territory lost earlier this month. Silver is now up 8% since hitting its 2017 low on May 9.
Only around 30% of annual supply comes from primary silver mines while more than a third is produced at lead/zinc mines operations and a further 20% from copper mines. Only 6 of the top 20 producers are primary silver miners.
The biggest winners among the top 20 producers were Hecla Mining which upped production by nearly half and increased silver revenues 62% thanks to the stronger silver price in 2016.
Perth-based South 32 added 4.3 million ounces or 30% to its output, netting the diversified miner $94 million more from its silver output last year.
At Goldcorp’s Peñasquito mine, Mexico’s largest gold producer, output of silver was down 9.5 million ounces last year dragging down the Vancouver-based company’s overall silver output by 30% or $150 million.
Global silver primary production dropped in 2016 for the first time since 2002 due to lower output from lead/zinc operations and primary gold mines with production from the latter declining by 9%. Scrap supply also fell, hitting its lowest level since 1996.
Last year 885.8 million ounces were mined, down less than 1% from the year before, but with significant falls registered in top producer Mexico (186 million ounces) after 12 years of strong gains.
Mexico is followed by Peru and China with production of 147.7 and 112.4 million ounces respectively. Production drops off quickly after that with fourth placed Chile and no 5 Russia supplying less than 50 million ounces.
Russia, Australia and Argentina recorded substantial declines in output while Iran entered the top 20 producing countries for the first time. US output was steady at around 35 million ounces.