Analyst Mistaken: World Silver Production Did Not Rise In 2015, It Declined

There was a recent report stating that global silver production increased in 2015.  Sadly to say, it was wrong.  World silver production did not rise in 2015, it declined.  The folks at Smaulgld.com put out an article yesterday titled, Global Silver Mining Production Increases In 2015.

In the article Smaulgld stated the following:

In its January 2016 report, the U.S. Geological Survey (USGS) estimated that global silver mining production rose about 2% in 2015. The USGS estimated total global silver mining production in 2015 to be 27,300 metric tonnes (877,714,110 ounces of silver*) vs. 26,800 metric tonnes (861,638,760 ounces*) tonnes in 2014.

Louis Cammarosano, who runs Smaulgld website, took the data from the USGS 2016 Silver Report as Gospel.  Unfortunately, the figures in the USGS 2016 Silver Report are estimates.  The USGS will revise these figures and show a decline in global silver production in 2015.

Why?  Because I have the actual data from the various government websites that show declines, not increases.  Furthermore, I have email exchanges and speak with the USGS silver specialist and know that the information is only preliminary and should not be viewed as accurate.

First, let’s start with the USGS 2016 Silver Mineral Commodity Summary Report:

As we can see, the data in the USGS table shows global silver production increasing from 26,800 metric tons (mt) in 2014 to 27,300 mt in 2015.  Again, these are estimates.  Let’s focus on four of the countries, Mexico, Peru, Chile & Canada.

According to the USGS, they show all four of these countries increasing in silver production in 2015.  However, only one country actually reported an increase in silver production… and that was Peru:

This table is taken directly from Peru’s Ministry of Energy & Mines website.  Silver production is shown as “Plata” at the bottom of the table.  Peru’s silver production increased 8.8% in 2015 over 2014 by 334 mt.  The USGS only shows Peru increasing production by 20 mt, whereas it was 334 mt.

Secondly, the next three countries actually reported declines in silver production.  Let’s look at Canada first:

Silver mine production from Canada declined 23% from 493 mt in 2014 to 379 mt in 2015.  The data in the USGS table above shows Canada producing 500 mt of silver in 2015.  They overestimated it by 121 mt.

Next, we have Chile.  The USGS shows Chile increasing silver production by 30 mt to 1,600 mt in 2015.  Unfortunately, this data is also incorrect.  According to the figures put out by the Chilean Copper Commission, domestic silver production declined from 1,573 mt in 2014 to 1,504 mt in 2015:

Chile’s silver production declined 4% in 2015, not the 2% increase stated by the USGS in its table above.

Finally we have Mexico.  The USGS data shows Mexico increasing production by a hefty 8%, an additional 400 mt compared to 2014.  However, Mexico’s Government INEGI website shows a decline, not an increase:

The data for Mexico is only up until Nov 2015.  I estimated production for December to be 500 mt.  That would put Mexico’s total silver production at 5,618 mt, down 2.6% from the 5,766 mt in 2014.  You will also notice that Mexico’s silver production was even higher in 2013 at 5,821 mt.

So, if we add up all these declines, we have the following:

Mexico = -148 mt

Canada = -114 mt

Chile = -69 mt

Total = -331 mt

Even with Peru up 334 mt, it puts these at a wash… zip.  Then if we add the decline from the United States, Bolivia, Australia and Poland, global silver production will likely be down 1-2%.   The USGS shows Australia only down 20 mt, but they are down a hell of a lot more than that.  Australia reported 1H 2015 silver production down 41%.  It jumped higher in Q3 2015, but I doubt it will make it up in the last quarter.  So, I estimate Australia to report a decline of at least 50-75 mt… maybe more.

Furthermore, KGHM Polska reported a decline in Q1-Q3 2015 silver production to 917 mt versus 932 mt during the same period last year.  Thus, total full-year silver production from KGHM Polska will likely decline in 2015.  KGHM Polska produces all the silver for Poland and it is the largest silver mining company in the world (as a by-product of copper mining).

The lesson to learn here is this… you need to go to the correct source to provide accurate information.  While Smaulgld publishes some excellent work, they also put out articles with faulty or inaccurate data and information.  We hope they spend a little more time doing the correct research, rather than put out information that is inaccurate.

If the FAN HITS THE COW EXCREMENT this year, 2014 may turn out to be the year, the world PEAKS IN SILVER PRODUCTION.  We will see.

 - SRSrocco Report