This week, the Wall Street Journal reported that “Peru, Mexico Vie for Top Silver Spot“.
Mexico and Peru are jockeying for the title of the world top silver producer. The two countries supplied about 30% of the world’s silver in 2009, according to the Washington-based Silver Institute.
Henry Luna, a director at Peru’s Ministry of Energy and Mines, said that the country expects to increase production from 3,637 metric tons last year to 4,089 metric tons (131.5 million troy ounces) in 2011.
Mexico’s National Statistics Institute, or Inegi, reported 2010 production of 3,116 metric tons last year. Over the weekend, Camimex, the Mexican mining industry group, sent out a news release claiming Mexico has overtaken Peru, according to its own figures.
The battle lines are drawn as both nations point to a significant ramp-up in production that will keep them at the top of the silver heap. Both countries are looking for foreign investment for projects that require big upfront expenses for long-term gains.
It was only in the last 10 years that the bustling mining industry in Peru allowed it to pull ahead of Mexico as the top producer.
Jaime Lomelin, chief executive of silver miner Fresnillo PLC, said last week that he expects Mexico will retake the lead this year or soon after. “We should feel very proud to return to being the top producer of silver in the world, and we can maintain that position for many years,” he told reporters.
Fresnillo, whose parent company is Mexico’s Industrias Penoles, is the biggest primary silver producer in the world. Two big Fresnillo mining projects coming online this year should add as much as 155.5 tons to silver production in 2011, Mr. Lomelin said.
Mr. Luna, who has forecast that Peru would maintain its No. 1 producer position over the next few years, said the South American country’s output growth should be supported by higher production at the Antamina SRL mine and at Volcan Compania Minera SAA, currently Peru’s largest silver miner. The Bear Creek Mining Corp.’s Santa Ana and Corani projects, are also expected to both produce sizable amounts of silver.
Interest in increasing silver production has risen along with the price of metal. “Silver is turning into a refuge metal,” said Michael DiRienzo, executive director of the Silver Institute.
On Monday, March silver futures rose 90.6 cents, or 2.8%, to settle at $33.804 an ounce, their highest finish since March 5, 1980.
Industrial demand for silver includes uses as a conductor of heat and electricity and as an antibacterial agent.
SOURCE: Wall Street Journal