Silver Mine Supply Growth Remains Elusive Despite Record Prices Above $75/oz

Silver's supply inelasticity has become the market's defining structural feature. Despite prices of $75/oz — more than double the 2020 average — mine production continues to contract. The fundamental issue is that 72% of silver output comes as a by-product of copper, lead, and zinc mining, meaning that silver prices do not directly drive production decisions at the majority of mines.

Primary silver mines account for only 28% of supply, and this segment is under pressure from declining ore grades and rising costs. The average ore grade at primary silver mines has declined from 180 g/t in 2015 to 125 g/t in 2025, increasing the volume of ore that must be mined and processed per ounce of silver produced. Operating costs at primary silver mines averaged $12.50/oz in Q1 2026, up from $9.80/oz in 2023, driven by labor, energy, and reagent cost inflation.

The mine project pipeline is notably thin for a metal at record prices. Only three new primary silver mines are scheduled for commissioning between 2026 and 2028, with a combined capacity of 8 million ounces (250 tonnes) per year — equivalent to just 1.2% of current annual production. The largest, SSR Mining's Cakmaktepe extension in Turkiye, adds 3 million ounces annually but is not expected to begin production until mid-2027.

Recycling — which accounts for 14% of total supply — is growing slowly. Above-ground silver scrap from photographic and industrial sources has been largely exhausted. Closed-loop recycling within the solar manufacturing sector is increasing as cell manufacturers recover silver from production scrap, reaching approximately 1,200 tonnes in 2025, but this is limited by the relatively small volume of end-of-life solar panels currently available for recycling.