LONDON (COmmodity Online): Silver-mine production is growing at a record pace, say analysts with Barclays Capital. The bank says there have been uninterrupted record levels of mine output since 2004. “Indeed, current price levels, even though a third below their intra-year highs, have supported healthy mine-output growth,” Barclays says.

“On a country basis, we continue to expect, the world’s newly crowned largest producer, Mexico, to Lead supply growth this year and in 2012, coupled with growth from China and Canada offsetting declining supply from Peru and Australia.” Mexican output dipped 1% year on year in August to 318 metric tons, but this was the first decline since April 2009 and output for the year to August is up 14% year on year to 2,543 tons.

Barclays says it looks for global mine supply to grow by 1.9% this year to a record around 24,500 tons and 3.9% to 25,500 tons in 2012. “Although grades at some mines have fallen and geopolitical risks have risen in key countries, given the marginal cost of production for primary producers, current price levels continue to provide a favorable environment to extend mine lives, reduce cut-off grades and develop new projects,” Barclays says.

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