Silver Production From Top 6 Companies Declined In 2013

Even though 2013 was a great year for physical precious metal demand due to manipulated lower paper prices, the top silver mining companies suffered a decline in overall production compared to 2012.  Of the top six companies, the largest four stated declines, while the two smaller producers increased mine supply slightly.

The largest silver producer in the world, KGHM Polska Miedz saw its mine supply fall the most by 3.7 million oz (9%), from 41 mil oz in 2012 to 37.3 mil oz in 2013.  Furthermore, BHP Billiton’s silver production fell from 39 mil oz in 2012 to 37.5 mil oz in 2013, while Fresnillo’s production declined from 36.9 mil oz in 2013 to 34.5 mil oz in 2013.

The chart below shows the change in production year-over-year from the top silver mining companies:

Top 6 Silver Mining Companies Produciton NEW

Production grew from the two smallest companies in the group.  Polymetal increased its silver production  (+0.7 mil oz) from 26.5 mil oz in 2012 to 27.2 mil oz in 2013 and Pan American Silver added nearly a million oz.

Overall silver production from the group in 2013 declined 6.2 million oz (3%), from 199 mil oz in 2012 to 192.8 mil oz in 2013.

Top 6 Silver Production Figures

KGHM = (2012/ 41 mil oz) (2013/ 37.5 mil oz)

BHP Billiton = (2012/ 39 mil oz) (2013/ 37.5 mil oz)

Fresnillo = (2012/ 36.9 mil oz) (2013/ 34.5 mil oz)

GoldCorp = (2012/ 30.5 mil oz)(2013/ 30.3 mil oz)

Polymetal = (2012/ 26.5 mil oz) (2013/ 27.2 mil oz)

Pan American (2012/ 25.1 mil oz) (2013/ 26 mil oz)

Smaller Primary Silver Miners Production Increased In 2013

As the larger silver mining companies struggled with maintaining production in 2013, the smaller seven primary miners actually increased their total mine supply 6 million oz.

Looking at the chart below, we can see that the majority of growth in silver production came from First Majestic, Hecla and Endeavour Silver.  Each company added 2.3 million oz of production over the year before.

7 Primary Silver Mining Companies Production

Silver production from Coeur fell 1 million oz, Silver Standard dropped 400,000 oz and SilverCrop declined 300,000 oz.  Overall production from the group increased 6 million oz from 54.3 mil oz in 2012 to 60.3 mil oz in 2013.

7 Primary Silver Miners Production

Coeur = (2012/ 18 mil oz) (2013/ 17 mil oz)

First Majestic = (2012/ 8.3 mil oz) (2013/ 10.6 mil oz)

Hecla = (2012/ 6.4 mil oz) (2013/ 8.9 mil oz)

Silver Standard = (2012/8.6 mil oz) (2013/ 8.2 mil oz)

Fortuna = (2012/ 4.0 mil oz) (2013/ 4.6 mil oz)

SilverCorp = (2012/ 4.5 mil oz) (2013/ 4.2 mil oz)

(Note:  Pan American Silver is classified as a primary silver producer, but it was included in the top 6 category along with Fresnillo — another primary silver miner)

What a difference between these two groups.  The largest 6 companies silver production declined 3% year-over-year, while the 7 primary silver miners increased 11%.  Even with the large increase coming from the primary silver miners, total production from these two groups declined slightly in 2013:

Total Production From Both Groups

Top 6 Companies = (2012/ 199 mil oz) (2013/ 192.8 mil oz)

7 Primary Miners =  (2012/ 54.3 mil oz) (2013/ 60.3 mil oz)

2012  Grand Total =  253.3 mil oz

2013  Grand Total =  253.1 mil oz

Thomson Reuters GFMS released a Silver Market Update (Nov, 2013) for the Silver Institute including estimated mine supply for 2013.  GFMS forecasts world silver production to increase 27 million oz to a new record of 814 million oz in 2013.

World Silver Production

The 2014 World Silver Survey will be out in April and it will be interesting to see if global silver production actually increased 27 million oz in 2013.  According to the data provided above, the two silver mining groups combined silver production was flat in 2013 compared to 2012.

Furthermore, I took a look at some of the other large silver producers and found that their production was either flat or declined slightly.

Buenaventura = (2012/ 17.3 mil oz) (2013/ 16.3 mil oz)

Hochschild Mining = (2012/ 13.6 mil oz) (2013/ 13.6 mil oz)

Southern Copper = (2012/ 13.6 mil oz) (2013/ 13.5 mil oz)

World silver production will continue to increase for the next several years, however I believe we will see a peak and decline in production soon afterwards.

Forecasting future silver production will become increasingly difficult as the world enters into a future in which it experiences a decline in global oil production.  That being said, peak silver will more than likely occur first in the base metal by-product industry.

By-product silver production accounted for 72% of the total global mine supply in 2013 (according to the 2013 World Silver Survey).  Here is the breakdown:

2012 World Silver Production Breakdown:

Primary = 28%

Lead & Zinc = 39%

Copper = 20%

Gold = 13%

The market does not realize that when Global Oil Production declines, so will the demand for base metals.  Energy is the driver of the economy.  So, with less energy, means less growth…. and less growth equals less demand.

So if there is less demand for base metals and other commodities in the future… then why would gold and silver benefit?  It comes down to my premise that as the world’s oil supply contracts…. so will the value of most paper and physical assets.

This will force investors to flee increasingly worthless paper assets (and many physical ones) for safe havens such as gold and silver.

I will be covering this in great detail in my upcoming report… THE U.S. & GLOBAL COLLAPSE REPORT. 

I truly believe the majority of investors are not prepared for the changes coming.

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14 Comments on "Silver Production From Top 6 Companies Declined In 2013"

  1. Steve, as always I really appreciate your work and solid information.

    What I’m really not understanding is why with flat new supply (mining) and likely declining scrap, supposedly very small ETF off-loading… with record demand from investors, jewelry / flatware, and steady industrial demand…and supposedly tight global inventories why are we not hearing of any tightness or shortages from industrial users or bullion companies?

    Assuming all the data is generally on point, then the only option I see is that someone has significantly more supply than is being acknowledged?

    How else can demand be up, supply flat, negligible global inventory, and no shortages or price spikes take place???

    I’m asking this as a stacker and not a troll…and hope we can open a discussion on what is happening and how much or where this hidden supply is coming from…and how long it could continue?

    • Chris,

      The answer to your question can be summed up in one sentence:

      FUNDAMENTALS PLAY NO PART IN THE MARKET PRESENTLY.

      I could write several pages on why it is so, but there isn’t a wholesale shortage of silver even though demand picked up substantially in 2013.

      As I have mentioned several times before, INVESTMENT DEMAND is the key. The Fiat Monetary Authorities killed silver investment demand starting with the 5 margin hikes in May-June 2011. It has been all downhill since then.

      Even with a possible 70-100 million oz supposed surplus of silver… it’s really peanuts when we figure that a measly $2.1 billion would buy up the entire amount. NOTE: Those supposed surplus figures are according to Thomson Reuters GFMS. I hardly doubt we had anything close to that. amount.

      The Fiat Monetary System is in serious trouble, because the Dollar is losing credibility. Once we see a collapse in the fiat monetary system… all the SUPPLY & DEMAND forces for silver will becoming totally MEANINGLESS.

      I will explain this more in detail in future articles.

      steve

      • Steve,

        thanks for the reply and I think I’m understanding you…that the big boyz of investment w/ trillions available are being dissuaded from investing in silver leaving only smaller investor classes worldwide buying up mint, bullion, and ETF “silver” shares alongside industrial/jewelry.

        The COMEX margin attacks were clearly a signal to those playing leveraged long paper silver to cease and desist from long paper silver. Gold likewise suffered a price drop but absent the margin hikes, China seemingly decided to vacuum up all the physical gold available plus drain the ETF’s (slowly cornering the market?)…but no one has done (or is allowed to do) likewise in the much smaller world of physical silver nor have the ETF’s been looted as their gold cousins have.

        I’m not arguing w/ you because I can’t put together a cogent argument…it’s as you say and totally illogical why some party(s) wouldn’t take the seemingly simple step to corner the tiny silver world? Someway, somehow, beyond COMEX money is being diverted from silver in particular but also gold and in general commodities and being force fed into equities, RE, CRE, and global bond/ sovereign debt.

        I look forward to your posts and appreciate your POV and great data you pull together.

  2. Lets see, in 2013 the top 6 silver miners produced 192.8 million oz of silver and India imported how much? — all of it plus another 4 million ounces.

    The top 7 primary silver miners produced 60.2 millions ounces. A year ago, before they picked up production, the Sunshine Mint alone was fabricating all of that — 1.2 million ounces per week (62.4 million ounces per year) http://www.youtube.com/watch?v=3G2gM4kI8G4

  3. In the event of a global fiat currency collapse, and the purchasing power of the consumers of the world is drastically reduced, wouldn’t the industrial demand for silver also be decimated? Cell phones, laptops, 72 inch televisions could become superfluous in such a scenario.
    It seems to me that in the event of a currency collapse, the industrial suppliers and weak investors would be looking to unload their bullion for whatever they could get for it. Wouldn’t the world become awash in cheap silver?
    I am a very serious silver stacker, am already years long with what one might consider “strong hands”, but I do have my weak moments…

  4. Why is silver flat? This basic question keeps coming up in a variety of ways, and from a variety of posters, time and again in the postings here. Every since the April massacre of 2012, the world of consensus pm pundits and their followers have been content to repeat same mantra of Comex and JPM manipulation, followed by increasingly hollow invocations to “stack the smack” and “screw you Blythe!”

    By the mere presence of the question here, we can know that the silver orthodoxy has at last exhausted its’ overdrawn credibility…and that it’s finally time to move on to the heterodoxy of ‘unapproved’ explanations for the phenomena of silver’s dull lustre, With the kind permission of the trail guide here, and the abeyance of the barking dogs of dogma, I propose we begin the journey now. For time runs short, and we have spent sufficient of it setting the stage for debate.

    How to begin? As with every detective story, we need call upon those with the nose best disposed to pick up the scent of silver’s mysterious malady… and no better foxhound exists than the much-maligned “heterodox Austrian” economist Prof. A Fekete. From an article published before the full magnitude of the current crisis of the west was visible(2008), he speculated upon the nature of silver’s manipulated pricing, and the perps behind the curtain. THE DOUBLE WHAMMY OF GEOPOLITICAL GLOBAL GOLD GAMES [http://professorfekete.com/articles%5CAEFDoubleWhammyOfGeopoliticalGlobalGoldGames.pdf] is in fact an expose of the Chinese closed shorting of silver, which hardly mentions gold at all, except in the title, nor Morgan, London, or any at all of the “usual suspects” of consensus conspiratorial narratives.

    Those who followed the previously offered link to his “Silver Saga” storyline, will already know the long history of China’s use of silver as a currency. And thanks to Mr Savoie’s work, they may also know about the scheme by which FDR was induced him to ‘finish off’ the work of global demonetization of silver via actions which provoked such a severe deflation in China as to end up destroying the economy and the middle class of that country in the same way that earlier the British had destroyed Indias’ economic self-sufficiency by cratering it’s silver-based monetary system.

    This action being initiated under the guidance of Roosevelt was nothing if not appropriate, as the root of his own families wealth lay in the merchandization of opium as a tool to defraud China of it’s vast silver stocks. http://www.mapinc.org/drugnews/v97/n196/a03.html

    What readers might not know, however, is that this program which furnished the means to turn China over to the fiat-based money system of control was demanded and initiated by the silver lobby in the United States! Wheels within wheels…
    I am running out of battery power due to a spate of rainy weather, so because of that [energy-driven] reality, I propose to end this with the suggestion that interested readers peruse the links provided, and having digested their potential import, return with arguments for or against the possibility that the Chinese are indeed hiding their huge stock of silver as a ‘secret weapon’ which not only hedges their treasury bond predicament, but will act in the future as their means of controlling international monetary markets!

    If readers are desirous of my doing so, I will happily pursue this theme forthwith, as there are many rich side veins to explore.

    btw… If there’s something wrong with the way the link is appearing here, just go to http://professorfekete.com and track down the article therein… that is a site which needs be on every serious silver sleuths’ bookmarks anyhow!

    • Rouge. Fekete fails to take into account lots of gold and silver was plundered by the Japanese in WW2.

      • Agreed about the gold. Not so sure about the silver….
        any specific references to plundered silver that you know of?

        • I don’t have any references, but human nature is human nature. What would you do if you just busted open a bank vault and inside you see boxes of gold and silver coins? Maybe the highest ranking officer took only gold, but im sure as hell the foot soldiers would have cleaned up anything else worth of value.

          • roguefaction | March 12, 2014 at 1:31 am |

            Thanks for the link.

            The issue of Japanese looted plunder is poorly documented it seems… it doesn’t help that much of the available references come from books like the Seagraves’ GOLD WARRIORS, which seize upon reputed vast hordes of stolen gold in the Philippines to build a case which seems to get no traction outside of their own anecdotal sources… David Guyatts THE SECRET GOLD TREATY is a little better quality research in the genre, but still gives up little evidence of movement of physical SILVER during the WW2 era.

            My understanding is that much of the silver which ended up in the possession of the Japs was stolen during the first Sino-Japanese War, when silver still had a high profile in international currency affairs.

            Some third of a century later, after the collapse of the American silver buying scheme, and the accompanying demonetization of silver by the Chinese, there was a lack of real collateral value for silver which would have greatly tarnished it’s liquidity in bullion form in the far East… as an item to carry around in your kit bag!

            While your scenario is not implausible, it’s just as likely that Fekete is correct that a lot of stranded silver stayed in China out of the hands of the Japanese…

            OR, was sent to America for safe-keeping, along with gold, in the pre war 1934-period. Which opens up the whole other can of worms… of the bearer bonds and certificates thing which keeps coming up from time to time.

            The case may be impossible to prove either way, but I’m not counting Feketes’ theory out for now… the Chinese are very adept at not showing their hand, and it is even possible that the current Indian government policy which is directing imports to switch over to silver from gold may be a deliberate result of insider BRICS-shared knowledge about what is coming down the pike!

      • Roo,

        Took me till now to follow up on behalf of the theory you proposed, re Jap plunder of Chinese silver…

        using the available material from both Guyatt, and the Seagraves(primary source quoted in your google reference). It surprises even me how little there is to back up the notion! It seems that there were units of the Jap forces dedicated to wholesale extraction of valuables of any kind from civilian and commercial targets, operating in all the SE Asian countries they occupied.

        But in the case of China, any reference to silver being plundered is restricted to the pre-WW2 period, during the so-called “Rape of Nanking” – after which, while there are references to gold and diamonds… the ledger is completely absent silver. That is not true for other occupied countries – a great deal of silver was plundered from Dutch Indies, and perhaps the Phillipines, but the Philipinos managed to get most of their silver stock out via a US submarine to Australia.

        This anecdotal evidence would seem to indicate that Asian governments(as opposed to colonial ones!) had foreknowledge of what was to come, and made plans to secure their silver currencies out of reach of the Japs. Though I had some doubts about Antals claim after your presenting the point, I now believe it more than likely that Fekete was correct – large amounts of silver were found and secured by the Chi-coms after 1949. And just as in Soviet Russia, the commies were in no way unalert to lucre of the precious metal kind… thery were very meticulous in grabbing it! But the gold in large part had to be sent back to their Frankfurt/WallStreet backers!

        It may not be without significance that only an Aussie(correct me if wrong) responded to this… a gamechanger which, in combination with the rapidly unfolding debacle of American impotence in the Ukraine, is part of the new paradigm in which Americas’ and Americans ability to call the shots in the rest of the world, and even in their own lives is diminishing faster than the price of AU after a 2 am smackdown of the classic kind!

        As gold establishes a trend of higher highs and higher lows each day now, and silver flatlines instead of following… the fact that the fate of silverbugs stashes now rests entirely with the Chinese is not yet registering on the radar of those who most need to know.

        Of the different stages of big phase transitions -denial…grief… anger etc.,
        …it looks like Americans are still stuck in the denial phase! Hmm… good luck with that ostrich thing! Stick the neck down low enough, you may be able to catch a glimpse of the stock flow between the NYFED vaults and the new Chinese subsidiary pm transfer point conveniently connected by tunnel under the former JPM office tower!

  5. Apologies for the lack of proper editing above…

    with laptop battery at critical, and nothing in the battery bank. it was a case of ‘publish or perish.’ I can’t edit it so I’ll just have to grin n bear it. The silver lining of that snafu is how well it demonstrates Steves version of the EROI principle in action, rather than theory… no solar ENERGY, no communications, no matter how much silver n gold is stored in the panels, computers or cell phones!

    A few hours this afternoon of clearing skies, and I’m back in touch with the wider world. I’ve taken advantage of that to read this interview with Arthur Berman http://www.marketoracle.co.uk/Article44775.html on shale gas, with a particularly choice quote I think Steve in particular will enjoy:

    “Production from shale is not a revolution; it’s a retirement party.”
    BOOM!

    It was also interesting to learn there that the majors have invented a new term to compete with EROI…
    ROCE… return on capital invested… great PR marketing… but lousy economics, and still lipstick on a pig! That sort of sad sack posturing is a bit like reading the headlines on Zerohedge and the other deadender legacy sites today…. “SILVER SPIKES THE MOST IN THREE MONTHS”[!!!!{:]

    Desperation abounds.

  6. I have been looking forward to the 2013 resumee for a long time. Thanks for providing it in such detail. You’re the best, Steve!

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