Basics of Silver

Oct 19, 2013 No Comments by

History

The mining of silver began some 5000 years ago. Silver was first mined in about 3000 B.C. in Anatolia (modern day Turkey). These early lodes were a valuable resource for the civilizations that flourished in the Near East, Crete, and Greece throughout antiquity.

Producers

Mexico is the largest producer of silver. According to the silver association it was found that India is the 19th largest producer of silver. According to “THE SILVER INSTITUTE” The world’s ten largest silver producers accounted for over 270 million ounces of the metal in 2012, or approximately 35 percent of global mine production.

Primary silver production grew to 28 percent of overall output in 2012, while production costs at primary mines averaged an estimated US$ 8.88 per ounce.

The list below was is based on information from The Silver Institute. Beside each company name is the country where its primary operations are located and its total silver production (millions of ounces)

1. KGHM Polska Miedź S.A. (Poland) – 41.0

2. BHP Billiton plc (Australia) – 39.0

3. Fresnillo plc (Mexico) – 36.9

4. Goldcorp Inc. (Canada) – 30.5

5. Polymetal International plc (Russia) – 26.5

6. Pan American Silver Corp. (Canada) – 25.1

7. Volcan Compania Minera S.A.A. (Peru) – 22.0

8. Compania de Minas Buenaventura S.A.A. (Peru) – 18.3

9. Coeur d’Alene Mines Corp. (USA/Mexico) – 18.0

10. Southern Copper Corp. (USA/Mexico/Peru) – 13.6

 ABOUT SILVER

Silver has been used for coins, jewelry and silverware. In recent times it is found that silver is even used for industrial purpose ,in  photography(About 1/3 of the silver produced worldwide is used in photography), health care and energy(auto industry).

Silver is highly valued for its heat and electrical conductivity, as well as its resistance to rust.

According to the silver users association it is found that the largest sector using silver is the industrial sector followed by photography, Jewelry & Silverware and Coins and Medals.

The usage of Silver in each sector:

Industrial

367.1 Moz

Photography

181 Moz

Jewelry & Silverware

247.5 Moz

Coins and Medals

41.1 Moz

Price

The price of silver is determined by the available supply versus fabrication demand. Fabrication demand has greatly outpaced mine production forcing market participants to use existing stocks to meet demand. As these available sources continue to decline, silver’s fundamental value continues to strengthen. However, because silver is a tangible asset, and is recognized as a store of value, its price can also be affected by factors like inflation, changing values of paper currencies, and fluctuations in deficits and interest rates.

Facts about silver

  • One grain of silver can be made into a sheet one hundred and fifty times thinner than a piece of paper.
  • Silver is the best conductor of heat of all elements.
  • Man learned to separate silver from lead as early as 3,000 B.C. Silver has been mined and prized for its beauty and durability for at least 6,000 years.

FACTORS AFFECTING THE VOLATILITY OF SILVER

  • Fluctuating industrial demand .
  • Geo-political uncertainties
  • Rising crude oil prices
  • Depreciating dollar
  • Government policies on major export and import
  • Prices of gold and other commodities.

The new use of silver

  • Silver contains anti-bacterial properties and researchers have found that silver can be used as a biocide. Burn units in hospitals use bandages that release silver ions that help with healing and reduce the need for frequent dressing changes.
  • Research on silver use in fuel cells and catalysts is well underway by the auto industry. Silver has a significant cost advantage when compared to platinum.
  • The electronic industry is continuing to reduce the amount of gold used in bonding wires and plating. The industry is replacing it with silver, a cheaper and equally durable substitute.
Commodity

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