What If Silver Is Included in Critical Mineral List in 2024?

白银三大需求的增速将翻倍
Published on: February 2, 2024
Author: Caroline Kong

Silver is the best electrical and thermal conductor of all metals, hence is highly valued in electrical applications. Because of this, more than half of the global demand for silver comes from the industrial sector.

In a letter to Jonathan Wilkinson, Canada’s Minister of Energy and Natural Resources, on Wednesday (31 January), the CEOs of 19 mining companies, including top producers Coeur Mining, Hecla Mining, and First Majestic Silver, joined together to call for silver to be added to the Canadian Critical Minerals List.

The letter reads, “Silver is considered to be the best conductor of electricity, the best conductor of heat from metals, and the best reflective material. These properties make silver an indispensable material for many industrial and technological applications.”

A report by the Silver Institute states that in 2023, global silver demand is estimated at 1,167 million ounces, of which 576.4 million ounces (50 per cent) will be for industrial use. Aside from this, 161.1 million ounces of silver for photovoltaic use in 2023 will account for 14 per cent of global silver demand.

In fact, silver is also a common material used in nuclear reactors. At the 28th United Nations Climate Change Conference (COP28), Canada joined other countries in committing to tripling nuclear power capacity by 2050.

As a result, the demand for silver in the nuclear power sector is also expected to grow. In addition, silver is also used in electrical contacts and connectors for electric and hybrid vehicles. The demand for silver in the automotive sector is expected to grow as electric vehicles continue to gain popularity.

The letter mentions that misunderstanding of silver’s availability is the main reason for its exclusion from key minerals. Researchers around the world have warned that the transition to a low-carbon economy will lead to supply bottlenecks in the silver market due to supply constraints, disruptions in the supply chain, competition from other applications, and growing demand.

It is noted that specific conditions must be met when a mineral is considered for inclusion on the Critical Minerals List, including that it is critical to Canada’s economy or national security, necessary for the country’s transition to a sustainable, low-carbon and digital economy, and a sustainable, strategic source of critical minerals that will help Canada become an international ally of its neighbours. Critical minerals must also meet two criteria, namely that the supply of the mineral is threatened and that there is a reasonable likelihood that the mineral will be produced in Canada.

Last year, global demand for silver was estimated at 1.17 billion ounces, half of which was industrial silver. The fastest-growing industrial use of silver is photovoltaics (PV), with a demand of 161.1 million ounces in 2023, or 14 per cent of global silver demand.

This compares to a silver market deficit of 237.7 million ounces in 2022, the largest on record. the combined deficit in 2021 and 2022 exceeds the cumulative surplus of the previous 11 years.

Canada is the thirteenth largest silver producer in the world and the second largest source of silver imports to the United States. However, over the past decade, Canadian silver production has shown a steady decline due to declining ore grades. In order to replenish the reserves of mineable resources, additional exploration is required to identify new ore bodies.

If you’re interested in investing in silver, you might want to keep an eye on this company: Silver Storm Mining Ltd. (TSXV:SVRS). Silver Storm Mining Ltd. holds advanced-stage silver projects located in Durango, Mexico. Golden Tag recently completed the acquisition of 100% of the La Parrilla Silver Mine Complex, a prolific operation which is comprised of a 2,000 tpd mill as well as five underground mines and an open pit that collectively produced 34.3 million silver-equivalent ounces between 2005 and 2019. The Company also holds a 100% interest in the San Diego Project, which is among the largest undeveloped silver assets in Mexico.

Disclaimer: Investing involves risk, and individuals should conduct thorough research and seek professional advice before making financial decisions. NAI is being compensated for this content. Materials contained in this content are for information purposes only and is not intended to constitute an offering of securities in any jurisdiction. Nothing on this content should be construed as an offer, solicitation or recommendation to buy or sell products or securities.

In-Depth Analysis Mining Precious Metals Silver