Peru’s Largest Primary Silver Mine Production Plummets 54%

As the world financial system heads closer to the abyss, global production of the second most important precious metal, silver, continues to deal with serious problems.  According to Peru’s Ministry of Energy and Mines, the country’s largest primary silver mine saw its production plummet by 54% in the first quarter of 2019.

The Uchucchacua Mine, run by Buenaventura, is not only the largest primary silver mine in Peru, but it is also ranked third in the world.  Buenaventura reported that silver output at the Uchucchacua Mine decreased during Q1 2019 due to a contractor strike that lasted 21 days and significant rains.  However, silver production at Uchucchacua continued to be weak in April, three months after the strike ended.

Interestingly, silver production at Uchucchacua started to decline in the third and fourth quarter of 2018:

As we can see, Uchucchacua’s silver production fell from 4.3 million ounces (Moz) in Q1 2018, to 3.2 Moz in Q4 2018, and further to 1.99 Moz in Q1 2019.  And, if we look at the data put out by the Peru Ministry of Energy and Mines, Uchucchacua’s silver production fell another 20% in April 2019 vs. the same month last year.  So, there seems to more trouble going on at Uchucchacua than a strike and heavy rains.

If the weakness of silver output continues in the Uchucchacua Mine along with other leading silver mines, we could see global silver production decline again this year to below 840 Moz in 2019.  According to the 2019 World Silver Survey, world silver production fell to 856 Moz in 2018, down from a peak of 894 Moz in 2015:

I was quite surprised to see how much silver production declined at Uchucchucua as I have been recording data from the mine for several years to calculate my “Top Silver Miners Average Yield” which I posted in a new updated chart in a recent article.  The average yield at the top eight primary silver mines fell to a new low of 6.8 oz per ton last year:

I doubt many silver enthusiasts realize how rich the silver ore grades are in the Uchucchacua Mine. In 2018, the Uchucchacua Mine in Peru produced silver at an average yield of 11.1 ounces per ton (oz/t). The Uchucchacua Mine is one of the largest high-grade silver mines in the world.  Now, compare the following silver yields from the top five primary silver mines last year:

Top 5 Primary Silver Mines Average Yield 2018(ounce per ton= oz/t)

Uchucchacua = 11.1 oz/t

Dukat Mine = 8.2 oz/t

Saucito Mine = 7.1 oz/t

Fresnillo Mine = 6.2 oz/t

San Julian = 4.2 oz/t

Of the top primary silver mines, by the highest output in 2018, Uchucchucua had the largest yield in the group, much higher than Fresnillo LLC’s two largest operations, the Saucito, and Fresnillo Mines.  Here is a chart showing the top eight primary silver mines in the world, according to the data in the 2019 World Silver Survey, (Figures shown in million oz – Moz):

So, the huge decline in Uchucchucua’s silver production is certainly something to keep an eye on as it’s the third largest primary silver mine in the world.  I will be providing updates on the global silver production in the next few weeks from the leading countries as well as the top primary silver mines when Q2 2019 data is released.

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OutLookingIn
Guest
OutLookingIn

There is much turmoil in South American mines in general.

One case in point:
Hochschild Mining which operates 3 mines in southern Peru, was forced to halt operations at it’s Arcata gold and silver mine, saying that low silver prices left the company little choice. The Arcata mine will be on full care and maintenance by Q2 2019.

Cobah.
Guest
Cobah.

A considerable decline in Mexican silver production for the month of April.
The amount produced was only 286 metric tonnes or 12.7% less than the
previous year.
https://www.inegi.org.mx/contenidos/saladeprensa/notasinformativas/2019/ind_miner/ind_miner2019_06.pdf

petedivine
Guest
petedivine

According to the article you sighted, Mexican Gold production was down 18% since last year. I believe there is a direct correlation between PEMEX and Mexico’s mining industry and right now both look like they’ll be trending downward well into the future.

Cobah.
Guest
Cobah.

Your correlation is definitely most valid.
Crude production was down 12 kb/d for the month of may.
http://www.pemex.com/en/investors/publications/Indicadores%20Petroleros%20Archivos/eprohidro_ing.pdf

Rick Gere
Guest
Rick Gere

How much surplus does the world have? Seems like someone is able to pull millions of oz of silver out of their ass. When will mining decline start to affect the price? When will the banks be unable to drive down the price with paper?

EP
Guest
EP

reminds me of this Zerohedge article today – implying that someone can control and direct an asteroid full of gold and silver onto the earth with $4 quadrillion dollars of gold. Maybe they should start by directing an asteroid to the comex..

DisappearingCulture
Guest
DisappearingCulture

EP,

Sounds like a job for Elon Musk, lol

petedivine
Guest
petedivine

I don’t know the answer to your question. But I do know that 22% of global silver mine supply comes from Mexico and I believe Peru is the fourth largest producer of silver. Russia and China are second and third. How it all plays out? No idea, but silver is used in a lot of products and if it declines I’d expect above ground silver to have a lot more value given the energy drain slowly squeezing mining operations globally. I just feel like the world is walking on egg shells. Things just feel like we’re on the verge of… Read more »

Leon Ber
Guest
Leon Ber

Big deal silver output is decreasing there is plenty of silver available and the price of silver is coming down once again with the commercial banks shorting over 133,00 contracts, the chart is going vertical on the increased short contracts these last few weeks. There is plenty of silver for industrial use , there is no shortage what so ever !!!!

Steve
Guest
Steve

Back of an envelope 1% of 8 billion =80 million. 1% of 80 million= 800k. 1% of 1% of the worlds population buys 500 oz of silver this year The system ends. Full stop end of story. There is not that much silver at all.

Jared
Guest
Jared

Steve,

Do you agree with the Harvey Organ article that says $20 an ounce Silver would blow up the banking system?! Is he close to being correct on this? The Banksters are really keeping a foot on silvers throat, perhaps they are more scared of it then gold?

DisappearingCulture
Guest
DisappearingCulture

I’ve heard the opinion off several silver “experts” that silver in the banker’s Achilles heal. I don’t know what is truth and what is supposition. But it is a tiny market cap,and it wouldn’t take much influx of investor cash to upset their apple cart.

Mark
Guest
Mark

At a gold to silver ratio of over 90:1, gold is kicking silver’s ass. As a big silver investor it sucks. However, you would think it would be the perfect time to sell gold and buy silver. I’ve read for years the actual amount of each in the ground is more like 15:1. Something is wrong.

From Canada Eh
Guest
From Canada Eh

Steve; New Gold Inc. just got Environmental approval for a 60 million OZ Silver deposit last week in BC, Canada … TSX/NYSE: “NGD”

From Canada Eh
Guest
From Canada Eh

I should also point out that; the Greens Creek mine which you are using in some of your charts is currently in “Care & Maint.” mode due to a labor dispute, and production there is currently nil.

From Canada Eh
Guest
From Canada Eh

My mistake; it’s HL’s Lucky Friday mine that is on strike, not their Greens Creek operation.

Jason
Guest
Jason

Steve, given you’ve said in previous articles it’s cheaper to mine silver than gold because of silver as a byproduct, etc, the ratio of Ag:Au ratio in the Earth’s crust doesn’t matter much. But, as silver is looked at as a monetary metal rather than a commodity, the Au:Ag price ratio will decrease, correct? Sorry if a tad off topic but I was just curious what your idea of how you see the ratio a few years down the road. Thanks for all of your great work!

Vogt
Guest
Vogt

As I always told you in a deflationary environment with low interest rates, silver and gold are dead.
Mines are no good either.
Even mines with 10 million ounces in the ground, nobody is investing money.