MEXICO CITY (Commodity Online) : Mexico could overtake Peru as world’s largest silver producer as Fortuna Silver Mines announced starting commercial production from its San Jose silver-gold mine in Oaxaca.
The mine is expected to produce 520,000 ounces of silver and 4,600 ounces of gold this year and 1.7 million ounces of silver and 15,000 ounces of gold in 2012 at an estimated cash cost of $5.04 per ounce, net of byproducts. Construction capex was $55 million.
Over the weekend, Camimex, the Mexican mining industry group, sent out a news release claiming Mexico has overtaken Peru, according to its own figures.
However Peru mining ministry said based on the latest figures from the U.S. Geological Survey, Peru is the world leader in 2010.
Peru and Mexico are jockeying for bragging rights as the world's top silver producer.
The battle lines are drawn as both nations point to a significant ramp-up in production that will keep them at the top of the silver heap. Both countries are looking for foreign investment for projects that require big upfront expenses for long-term gains.
It was only in the last 10 years that the bustling mining industry in Peru allowed it to pull ahead of Mexico as the top producer. The two countries supplied about 30% of the world's silver.
Mexico’s Fresnillo is the biggest primary silver producer in the world. Two big Fresnillo mining projects coming online this year should add as much as 155.5 tons to silver production in 2011.
According to GFMS, a leading international precious metals consultancy, as of Nov. 1, global holdings in silver-backed ETFs, or exchange-traded funds, stood at more than 490 million ounces
Anlaysts said demand for one-ounce silver coins is reaching record levels in the U.S. and Canada.
Industrial demand for silver, which is used as a conductor of heat and electricity, and as an antibacterial agent, is also boosting its price, analysrts added.
