The history of silver in Russia begins in the 10th century A.D. However, this does not mean that Russia is rich in silver. In fact, most of the silver items were made from imported silver, which, of course, could not suit the growing state.
Beginning in the 15th century, the search for silver deposits was actively conducted in Russia, in many ways fruitful, although there was little silver in Russia. The state body responsible for the extraction of silver, as well as other ores, was established by Peter I. In general, Peter the Great gave a very powerful impetus to the development of silver mining. A year after the creation of the "Order of Mining Affairs", samples of Nerchinsk silver were sent to the capital of Russia. Some time later, the first silver smelting plant in Russia, the Nerchinsky plant, was launched.
In the same 17th century, under Peter I, silver deposits were discovered in Altai, which began to produce an average of 16 tons of silver annually. Of great importance in the development of the silver industry under Peter I was the fact that Peter declared "Mining freedom". The essence of this decree was that now everyone could search for and extract precious metals, incl. and silver. With the coming to power of Catherine, this decree was canceled, but he fulfilled his role. The silver industry expanded until the 21st century. Now, Russia annually extracts enough silver to live in this plan independently of other countries and supply silver for export. As a matter of fact, the expansion of production continues to this day, although it does not represent any particular benefit for the country.
Major silver deposits in Russia.
Silver mining in Russia today is carried out in 20 regions of the country at more than 100 deposits, and the share of silver in the ores of these deposits is 100 grams / ton. At the moment, the leading field of all located in Russia is the Dukatskoye field, located in the Magadan region. It is followed by the Lunnoye and Juliet deposits, also located in the Magadan region, in terms of production. Together, they mine about half of the total amount of silver mined per year. About a quarter of the annual production comes from the Ural regions. And, finally, the smallest in Russia are the Norilsk fields and the Khakandzhinskoye field. The level of silver production here is 6-10%.
Thus, we can conclude that at the moment a large share of silver comes from Magadan and its region.
The main areas of silver mining in Russia.
The picture below shows several of the leading silver deposits in Russia. The largest regions in terms of the amount of mined silver are highlighted in dark brown. We can see that silver mining in Russia takes place mainly in the Magadan region, in the Krasnoyarsk region and in the Chita region. Yakutia and Chita are in second place.
In general, it should be said that only about 18% of the total share of silver mining in Russia is mined at enterprises engaged exclusively in the extraction of silver and / or gold. Silver grades per tonne are much higher than silver grades per tonne in foreign silver deposits.
Another 82% is mined at enterprises whose main task is the extraction of other minerals. Here the ratio of the amount of silver to a ton of ore is 1.5-2 times lower than at similar foreign enterprises.
The largest silver mining companies in Russia.
More than 25% of the country's silver reserves are mined by only one company: OJSC MNPO Polymetal. This company holds the ninth place in the world ranking and supplies about 48% of silver in Russia per year. Polymetal includes four smaller enterprises: Silver Magadan, Okhotsk Mining and Geological Company, Silver Territories, Khakandzhinskoe deposit, Yuryevskoe and Vorontsovskoe deposits. The company is constantly increasing its silver production. At the moment, the company produces about 25 tons of precious metals, it is planned to progress by 43 tons every year.
In second place after Polymetal are companies that mine silver as a by-product. These are OJSC Uchalinsky GOK, OJSC Norilsk Nickel and OJSC Gaysky GOK.
In addition, we can mention such companies as Prognoz-Serebro, Artel of Prospectors Ajax (Magadan Region).
So, to summarize:
- Russia became independent from other countries in terms of silver turnover.
- Every year there is an increase in the silver industry, part of the silver found in Russia is exported.
- Despite the growing level, silver mining is of little benefit to Russia. The country is still not included in the list of the best in terms of the amount of mined silver, and even if it does, it will not give Russia the opportunity to influence the world market in any way.
- The most productive region of Russia is the Magadan region.
- Silver mining in Russia is not the most profitable business.
According to The Silver Institute, global growth in silver production from mines slowed to 2 percent in 2015, with production hitting a record 886.7 Moz. The increase in production from mines is attributed to stronger performance in Peru, Argentina, Russia and India, while Canada and Australia have had lower levels of ore production than a few years earlier. Primary silver production from mines increased by 5 percent and accounted for 30 percent of the world's silver supply from mines. The overall decline in mine production in 2015 is expected to continue.
Primary production costs, including by-products and capital expenditures, were down 11 percent to $ 11.74 an ounce. The decline was driven by weaker local currencies, aggressive cuts in capital expenditures and lower fuel prices. Silver producers' hedge inventories rose 7.8 Moz in 2015 as fresh hedges more than offset contract redemption.
Mexico was the world's largest metal producer in 2015, followed by China, Peru, Australia and Russia. According to the US Geological Survey, silver production in Mexico increased by 400 tons in 2015 compared to 2014 and amounted to 5400 tons. Silver production in China in 2015 increased by about 40 tons to 4100 tons. In Russia, the volume of silver production in 2015 increased by 166 tons to 1,500 tons.
Silver mining in the countries of the world, tons *
| country | 2011 | 2012 | 2013 | 2014 | 2015 |
| Australia | 1725 | 1727 | 1840 | 1720 | 1700 |
| Bolivia | 1214 | 1206 | 1287 | 1344 | 1300 |
| Canada | 661 | 685 | 646 | 493 | 500 |
| China | 3700 | 3900 | 4100 | 4060 | 4100 |
| Mexico | 4150 | 4496 | 4861 | 5000 | 5400 |
| Peru | 3419 | 3481 | 3674 | 3778 | 3800 |
| Poland | 1167 | 1149 | 1199 | 1263 | 1300 |
| Russia | 1200 | 1400 | 1428 | 1334 | 1500 |
| USA | 1120 | 1060 | 1040 | 1180 | 1100 |
| Chile | 1291 | 1195 | 1219 | 1594 | 1600 |
| Other countries | 3553 | 4101 | 4506 | 5034 | 5000 |
| The world as a whole | 23200 | 24400 | 25800 | 26800 | 27300 |
* Source - US Geological Survey
Silver shipments from onshore stocks fell 7.5% to 153.9 million ounces (4,786 tonnes) in 2015, due to lack of sales from government stocks, reduced recycling of silver-containing waste and hedging of producers of only 7.8 million oz.
Scrap shipments were down significantly 13 percent at 146.1 million ounces, the lowest level since 1992 and the fourth consecutive year of decline. This decline was driven by less scrap collection on the market, as well as the fact that some manufacturers held on to the material in anticipation of higher prices. State sales of silver were again virtually absent.
World Silver Consumption
Globally, silver jewelry manufacturing increased for the third year in a row to hit a new high of 226.5 Moz, according to The Silver Institute. This increase was largely driven by impressive growth of 16 percent in India and Thailand, while North America grew 5 percent annually. These gains were partially offset by a significant decline in Chinese jewelry demand. The overall manufacture of silver items for the general public grew for the third time in a row and was estimated to have reached 62.9 million ounces, a ten-year high.
The largest component of physical demand for silver, industrial uses, which accounted for 50 percent of total physical demand for silver in 2015, fell 4 percent to 588.7 Moz. This drop was largely due to weak demand in developing countries and a stagnant global economy. Regionally, small increases in industrial demand were in the United States and Japan, the second and third largest sources of industrial demand, respectively. Electrical and electronic consumption fell 10 percent in 2015 to 246.7 million ounces, driven by slower economic growth in developing countries and continued weakness in computer sales.
Structure of world demand for silver, million ounces *
| industries | 2011 | 2012 | 2013 | 2014 | 2015 |
| Basic industries | 615,1 | 560,8 | 568,6 | 562,7 | 542,0 |
| The photo | 61,2 | 54,2 | 50,5 | 48,5 | 46,7 |
| Jewelry production | 187,9 | 185,4 | 217,8 | 224,0 | 226,5 |
| Silver items and dishes | 47,2 | 43,7 | 58,8 | 60,7 | 62,9 |
| Coins and medals | 210,4 | 160,5 | 242,1 | 236,1 | 292,3 |
| Total physical demand | 1121,8 | 1004,6 | 1137,9 | 1131,9 | 1170,5 |
| Net investment | -11,8 | 117,5 | 11,3 | -7,3 | -17,4 |
| Total demand | 1110,0 | 1122,1 | 1149,2 | 1124,6 | 1153,1 |
* Source - The Silver Institute
There are several highlights in the industrial segment. Silver demand in photovoltaic applications rose 23 percent in 2015 to 77.6 Moz, the second consecutive year of growth in the sector, driven by strong growth from Chinese solar panel manufacturers.
Silver demand from ethylene oxide producers rose an impressive 103 percent to 10.2 Moz. GFMS estimates that 137.5 Moz of silver went to ethylene oxide plants worldwide at year-end 2015, equivalent to 16 percent of silver production in mines in the same year.
Silver consumption in solders and alloys fell 5.0 Moz and demand for photography declined 4 percent in 2015. The rate of decline in silver consumption in photography has slowed significantly, to its lowest rate since 2004, as digital technology in the photography industry neared maturity.
World Silver Prices
Strong demand for silver from investors (and it made up about a quarter of the total demand for silver in the world) became the dominant factor that determined the movement of prices for the metal in 2012. Average price level in 2012 at $ 31.15 / oz. became the second highest ever after 2011. While 2012 was a volatile year for most precious metals, globally, investment in silver increased to a total of 252.7 million ounces (Moz). In monetary terms, this is approximately $ 8 billion, which is significantly higher than the average annual rate of $ 1.2 billion in the period 2001-2010.
Investor interest in silver declined in 2013 and 2014, and growing industrial demand was unable to compensate for these losses. In 2013, silver fell to $ 23.79 an ounce, well below analysts' forecasts of $ 33 an ounce. In 2014, the precious metal averaged $ 19.08 per ounce against the forecast of $ 31 per ounce.
Silver prices continued to fall in 2015. The average annual price for the metal was $ 15.68 per ounce, which is half the level of 2012. It was only in mid-2016 that silver prices returned to $ 20 an ounce.
Dynamics of the average annual silver prices in London
(cash contracts market), USD per troy ounce
By the end of 2016, silver prices had dropped to $ 16-17 an ounce. Silver averaged around $ 17 an ounce in 2016, slightly higher than in 2015.
Forecast of the global silver market in 2017-2019
Like gold, silver performed well for much of 2016 until the recent downward spiral following the US elections, with widespread perception that the Federal Reserve is moving towards tightening interest rates, HSBC reported.
"In our view, any surge in investor uncertainty or 'safe haven' demand, possibly based on geopolitical concerns, will strengthen silver in 2017," said analysts at HSBC, who predict a price range of $ 16.0 to $ 21 over 2017. 5 per ounce.
"We are also building our expectations on a solid footing as supply from mines may decline while demand for industrial and jewelery should rise."
The bank projects a silver price of $ 18.75 an ounce in 2017, $ 19.25 an ounce in 2018 and $ 19.50 in 2019. Analysts at HSBC project a 116 million ounce supply shortfall in the silver market in 2016, followed by 132 million in 2017.
"After years of steady growth, we expect to see a decline in mine supply in 2016 and 2017," HSBC said. "Secondary supplies are likely to remain at current weak levels. Physical demand from industry has been weak, but is likely to see a modest recovery in 2017, while demand for PV is strong. Low prices should push up demand for coins, bars and jewelry demand in 2017 ".
HSBC forecasts silver mine production to decline to 872 Moz in 2017 from 887 Moz in 2016, while silver scrap shipments will decline to 140 Moz in 2017 from 145 Moz in 2016. 2016 year. Industrial demand is set to rise to 550 Moz in 2017 from 538 Moz in 2016. Jewelry demand is forecast to rise to 288 Moz in 2017, up from 258 Moz a year earlier.
The total supply is projected at 1,032 Moz in 2016 and 1,027 Moz in 2017. Total demand is projected to grow to 1,159 Moz in 2017, up from 1,148 Moz in 2016.
Silver is the second most popular metal after gold. According to experts, the total volume of proven reserves of this precious metal in the world now reaches 600 thousand tons.
Every year, about 20-22 thousand tons of silver are mined in the world. So, in 2018, according to the American Geological Survey, 27 thousand tons were produced on our planet.
Which countries make the largest contribution to this industry, and what is the importance of Russia in the "silver" world?
World centers of silver mining
Back in the 19th century, all silver mining was concentrated in the countries of South America. And now this continent maintains a dominant position in the world market for "white" gold.
The largest reserves are possessed by Poland and Peru - about 110 thousand tons of precious metal each lie on the territory of these countries. However, in terms of production volumes, Mexican mining companies are ahead of the rest.
For more than a century, Mexico has consistently occupied the top line of the silver hit parade. There are about 200 mines containing silver in operation in the country. The largest deposits are located in Las Thores (4.3 million tons of ore) and La Encantada (3.2 million tons of ore).
In addition, large deposits are being developed in mines in the Mexican states of Chihuahua, Hidalgo and Zacatecas. The listed assets provide approximately 20% of the total production of "white" gold in the world.
Along with Mexico, silver is actively mined in Peru. There are many small mines scattered throughout the country, which together account for 17% of all silver mining in the world. The largest deposits in the country are San Rafaele and Eastern Cordillera.
The richest silver deposits in Poland are located within the city of Lubin, and in China the largest deposits are developed in the Ying region - 35% of all the country's silver reserves lie there.
China is also among the richest countries in silver. Although it does not have such large reserves as, for example, Poland, it produces much more precious metal.
Chile, Australia, USA, Russia, Bolivia, Argentina, Kazakhstan, India are also of great importance in the silver industry.
Silver of Russia
The proven reserves of silver in Russia today are estimated at 68 thousand tons. According to the Ministry of Finance, in 2018 the total volume of silver production in our country amounted to 1,119 thousand tons.
A total of more than one hundred silver deposits are being developed in different regions of our country. In the previous year, the first place in terms of production was taken by the Magadan Region (over 236 tons). The Chukotka Autonomous Okrug (over 112 tons) took the second place, the Khabarovsk Territory took the third place (over 51 tons).
Silver is also mined in the Krasnoyarsk Territory, the Chita Region, Yakutia, Buryatia, in the Republic of Bashkortostan, the Orenburg Region and other regions (their production volumes are not so significant).
Most of the "white gold" - about 30% - is mined in the depths of the Dukat hub (Magadan region). It includes 4 deposits - Dukat, Lunnoye, Goltsovoye and Perevalnoye.
The total resources of the asset are 1.4 million gold equivalent ounces, and up to 2.4 million tons of silver are processed here annually. And in 2018, 306 thousand ounces were received at Dukatsky - again in gold equivalent.
The asset is being developed by MNPO Polymetal, the largest silver producer in Russia, which accounts for ΒΌ of the total production of white gold.
Another large silver asset of the Magadan Region is the Juliet deposit. Precious metals on its territory are mined by the Omsukchan Mining and Geological Company. The total estimated reserves and inferred resources of the deposit reach about 475 tons of silver.
Photo: eliks.su
Rich in silver and the Ozernoye deposit in the Republic of Buryatia (developed by the Ozernaya Mining Company). So, its total reserves are 157 million tons of ore, which, in addition to other metals, contains 4.5 thousand tons of silver.
A significant increase in silver production is provided by Uchalinsky GOK (Bashkortostan), Gaysky GOK (Orenburg Region), Norilsk Nickel (Krasnoyarsk Territory). Chukotka GGK, Amur Zoloto, Millhouse, and Russian Platinum also contribute.
It is noteworthy that in Russia the vast majority of silver is mined by enterprises that specialize in other minerals. So, only 18% of the precious metal is extracted by companies whose activities are aimed exclusively at silver and / or gold.
Silver market
The first thing that representatives of the silver industry are paying attention to today is a 2% reduction in production in 2018 (to 26.616 tons). In many ways, the indicators began to decline due to a decrease in associated production in the production of zinc and lead. Moreover, a drop in production volumes has been observed for the last three years.
Secondly, in 2018, there was a drop in demand for industrial silver, which led to a decrease in total demand by 3%. And thirdly, in parallel, an increase in physical demand by 4% was recorded.
By the end of 2019, global silver production is projected to grow, in particular due to increased production in Mexico, Argentina and India.
Considering the latest trends in the market, in general, in the next couple of decades, the silver industry will maintain a more or less stable production.
However, experts estimate that the available silver reserves will last for about 21 years, provided that the rate of production remains at the current level. In this regard, the long-term forecast is disappointing: the whole world will enter the threshold of an acute shortage of silver.
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Silver, like its commodity cousin gold, has a rich history dating back millennia. Silver was first mined about 5,000 years ago in Anatolia, that is, in modern eastern Turkey. When the Europeans came to the New World, they discovered an abundance of silver. From 1500 to 1800 the three Latin American countries Peru, Bolivia and Mexico accounted for more than 85% of the world's silver production. However, since then, silver has been discovered in various regions around the world and its mining has become a global industry.
Silver has one important difference from gold: only 20% of its production is the result of primary metal mining. Most of it is a byproduct produced with metals such as copper, lead, zinc and gold.
Given that silver has experienced sharp, albeit volatile, price increases over the past decade and is also generating growing interest from retail investors, it would be interesting to know which countries have the largest reserves of silver in the ground to identify potential investment opportunities.
Although silver is mined all over the world today, Latin America continues to play a key role in this industry. In 2011, Mexico and Peru were the largest miners of the metal, followed by China. According to the US Geological Survey, Peru remains the country with the largest reserves of silver in the earth (120,000 tons), followed by (surprisingly) Poland and Australia.
Peru
This country is at the center of the silver mining industry and has held this position for several centuries. Some analysts even call it "Saudi Arabia of Silver" and they are right. Peru produced 110 million ounces of silver (3,437.5 tonnes) last year and is one of the few countries to have increased its proven reserves over the past decade.
There are a couple of easy ways for US investors to invest in the Peruvian silver industry. The first is the shares of the mining company Compania de Minas Buenaventura SA ADR (NYSE: BVN). You can also bet on the Peruvian silver industry using the iShares MSCI All Peru Capped Index Fund (NYSEARCA: EPU) ETF. Buenaventura holds the largest position in the fund with 17%, and almost 60% of the fund's portfolio is invested in mining companies.
Poland
The country is usually not the first to come to mind when it comes to commodity resources, but it is teeming with coal, natural gas, copper and even silver - last year Poland became the world's sixth largest white metal producer. It also has the second largest proven silver reserves in the world. According to the US Geological Survey, this change in the estimate of the reserves occurred recently following new information from the Polish government and sources in the silver industry.
The world's largest silver mining company is also Polish, KGHM Polska Miedz S.A. (KGHPF), last year it mined about 40.5 million ounces of silver. The company also mines a lot of copper and silver is a by-product of copper and zinc mining in the large mines in Lubin.
Australia
Australia is a reputable resource power. The country is the fourth largest silver producer in the world, producing 55.2 million ounces last year. These volumes are especially impressive when you consider how humble it all began near the city of Adelaide, South Australia, in 1840, when the first lead and silver mine was opened. Most of Australian silver is produced in highly mechanized mines for lead, zinc, copper and gold.
The world's second largest silver mining company in the world is Australian giant BHP Billiton ADR (BHP). The company owns a lead and silver mine in Carrington, northwest Queensland. It is the world's largest silver-focused mine (32.17 Moz of silver was mined last year).
Other silver hotspots in Australia are the Mt. Isa in Queensland and the McArthur River in the Northern North Territory. Other major silver producers in the country include mining giant Xstrata ADR (XSRAY) and Minmetals Resources.
In the world, silver is mined in volumes of about 20-22 thousand tons annually. The demand for this precious metal is always higher than the market can offer. This is directly related to the increase in the number of applications. Until recently, the main value of silver was its aesthetic qualities, which were often used in jewelry or in the manufacture of tableware. Now it is widely used in industry.
Scope of metal
The world is experiencing an increasing need for this precious metal, as it is used in various industries. Approximately 80% of the mined silver bars are used for the production of various equipment and electronics, for example, mobile phones, laptop and ordinary computers, batteries and many other modern devices.
In industry, metal is valued for its high thermal and electrical conductivity. If you lower the temperature with liquid nitrogen, then silver becomes a superconductor. Another important property is that the mineral does not oxidize at all, is almost completely inert and has excellent catalytic properties. A standard ingot can have a mass of 28 to 32 kg.
All the waste left from the industry goes to the needs of the jewelers and the production of precious coins.
At the beginning of the 21st century, production volumes almost doubled when compared with the previous period. At this rate, the deposits will last for about 30 years. Now people have depleted the mines of natural (physical) silver, available on the planet, by almost 95%.
The average content of the element in the earth's crust is approximately 70 mg per ton of ore. Usually in nature, it looks like an impregnation of other minerals. Pure silver can be found quite rarely. In mountains and sedimentary rocks, it usually accumulates in sulfides, clay, muscovite. Often, silver is mined in places where it is possible to organize a passing fence of gold, copper and lead ore. This method is considered the most rational. Of these ores, only a few contain large amounts of Ag, of which you can extract the element:
In the water of the world's oceans, the concentration of the precious metal is much greater than in the earth. But the complex and expensive technological process makes the extraction of Ag from water economically impractical. For living beings, this element is necessary, although its content in the body is small. He participates in almost all metabolic processes. Quite often it can be found in meteorites.
There is an interesting case in world history when a man found a large silver nugget in one of the Western countries. Its weight was 1065 kg.
Historians believe that they first began to mine silver about 7 thousand years ago. Ancient people knew only nuggets. It was found with great difficulty, because often the ingots were covered with a sulphide coating. Until the second century BC, Argentum was valued much more than gold. Mines began to form in Spain. In the modern world, most of this metal is mined by people using pyrometallurgical processing.
Ores are mined in an open or closed way. First, geologists use specialized instruments to determine the presence of various minerals in the bowels of the earth, as well as precious metals. After the discovery, the development of the site begins. The raised ore is crushed, and then silver is extracted from it by cyanidation or amalgamation.
Amalgamation has been used for over two thousand years. The method is based on the fact that the metal reacts well with mercury. The crushed rock is passed through the liquid metal. After the excess mercury is removed, solid particles of the reacted substance will remain. The evaporation of mercury will leave pure silver, which will be further melted into ingots.
Cyanide is that argentum dissolves in cyanide alkalis. After filtration of the solution, the metal is precipitated. All other impurities are easily removed with sulfuric acid.
World stocks of an element
Until the beginning of the 21st century, Central America and South America, as well as Mexico, were the main exporters of precious metals in the world market. They occupied approximately 85% of all silver mining in the world. After the development of modern technologies, the production and circulation of metal has become a global industry.
Silver deposits are scattered in the world, and Peru remains the leader in terms of reserves at the moment - 120 thousand tons.
The second place is occupied by Poland, which has about 85 thousand tons in the intelligence areas. In this country, silver is often mined as a by-product of copper or zinc production. Chile ranks third, Australia fourth, and Russia fifth. In total, about 600,000 tons are currently under development in the world. But with such a rate of production, the world's silver reserves will soon run out. Silver Leaders can be seen in the table.
The most profitable are the Mexican mining companies. This determines their high potential. Behind Mexico are China, Peru, Australia and Russia.
Precious metal mining in Russia
Silver is mined in Russia where its concentration is sufficient for industrial production. The amount is enough to meet their own needs and to sell metal abroad to other countries. Now there are more than 100 mines in the country, which are located in 20 regions of the Russian Federation. The statistics can tell which of them are the most productive. Dukat and Lunnoye account for almost 25% of the production of the entire Ural region. Silver reserves in Russia are sufficient to produce more than 1,000 tons annually.
Almost half of the country's precious metal produced by Polymetal. Its main activity is the development of deposits. The company also conducts exploration work throughout Russia. The rest of the enterprises extract silver as a by-product in the process of processing other metals. Russian deposits have reduced indicators of the content of argentum in one ton of ore, when compared with the majority of foreign ones.
The industry develops every year, although it is not one of the most profitable for the country. Mining and processing enterprises are gradually starting to introduce new technologies into the production process. The average annual production in Russia is 500-600 tons.
World deposits
Silver is very active when compared to gold. For this reason, it is extremely rare to find it in the form of nuggets. All deposits of importance from an economic point of view, are divided into two types:
- Directly silver deposits. In them, the ore has more than 50% Ag.
- Deposits containing other metals. The cost of silver in such ores is approximately 15%.
The richest silver deposits are located in Mexico, Peru, China, Russia, Bolivia, Poland and America. The development of these sites is carried out by both underground and open-pit methods.
It is quite rare for silver to enter the secondary market without any major losses. This is due to the fact that most of the demand comes from industry. Therefore, we can say that world reserves will gradually decline.