I decided to do a bit more digging and found a newly released April 2020 Mining Update in response to the global contagion. This new Mining Bulletin published Peru’s mine production data for January to April 2020. According to the recently released data, Peru’s silver mine supply in April fell to 85 metric tons (mt) versus 322 mt during the same month in 2019:
Peru’s silver mine supply collapsed by 74% in just a few months. If we convert to troy ounces, the year-over-year change was a decline from 10.3 million oz (Moz) to 2.7 Moz. Thus, the world’s second-largest silver mine supply fell 7.6 Moz in April. Now, if we look at Peru’s monthly mine supply over the past year, we can see that silver production started to decline in March:
Peru Silver Production Jan-Apr 2019 vs. 2020:
Peru’s silver production for the first four months of 2020 is down 8.3 Moz, or 22%. What about May?? Peru didn’t start opening up most of its mines towards the end of May. Thus, Peru’s silver production in May will also be significantly lower than the 340 mt reported during the same month last year How much lower?? Good question. My estimate would be between 75-100 mt. If this is true, then Peru’s silver production will be off by more than 15 Moz, and that doesn’t include any possible future shutdowns during the rest of the year.
I stated in past articles and videos that the global silver mine supply would easily fall by 50 Moz in 2020. If Peru loses 15 Moz, then we can assume that Mexico could lose 25-35+ Moz. And, if we add any additional silver mine closures around the world, it can easily curtail 50 Moz of global silver mine supply this year.
I will be providing more updates on silver mine supply out of Mexico when the data is released next week.