Introduction
With the year 2025 experiencing historic highs in global silver prices, prices can be explained, in part, by the decline in global production of the precious metal. Increasing demand of silver is well-documented: it is used in photovoltaic cells for electronics, solar power, wind power generation, electric vehicles, 5G infrastructure, AI hardware, and energy storage systems – all placing pressure on price. The decline in silver production only adds to a perfect storm of a shortage in silver. This article examines the reasons why global production of silver has declined in recent years.
Factors Behind Declining Silver Production
According to World Silver Survey 2025, by The Silver Institute, the global silver market recorded a deficit of over 148 million ounces in 2024. Several factors are behind the decline in global silver production:
A) Mine Closures
Mining Technology, in its July 30, 2025 report, stated that global production is declining because of a number of mine closures. Mexico, the world’s largest silver producer (produces 24 % of the world’s silver), has its San Julian mine experiencing lower output and will close in 2027. Other mines such as the Mercedes, Bolonitos, Dolores, and San Dimas will also close in 2025. The government’s restrictive policies on foreign investment are also listed as a factor.
Mining Technology further states that China’s silver production growth will be limited, in part by the mine closures of Shandong Pingyi and Fujian Yuaxin. As it produces 13 % of the world’s silver, the closures will have an impact. Peru’s production (13% of the global supply) is also expected to decline due to the closure of several major mines. Bolivia’s production is also expected to decline by 2030 because of the San Bartolome and Caballo Blanco mines.
Source: mining-techology.com July 30, 2025
B) Deteriorating Silver Ore Grades
Silver is often a byproduct of an alloy of metals. Many existing mines have operations extracting lower quality deposits than in previous decades. The U.S. Geological Survey has reported that silver ore grades have declined by about 30 % over the past 10 years. When adding increasing costs of environmental regulations, growth is even further reduced.
C) Constraints on Developments of New Mines
The new supply of silver is hindered by many technical challenges related to newly discovered being deeper underground and with lower grade. Remote projects also require costly and complex infrastructure.
D) Silver as a By-Product
As stated, the silver market is also a function of lead /zinc, copper, and gold markets. Silver mines that are primarily silver-producing are approximately 20 -30 % of global production.
E) Africa
Africa produces approximately 2 % of the world’s silver but faces security and infrastructure issues. According to IndexBox, in 2024, Africa’s silver production declined for the second consecutive year, after reaching a peak in 2022. The reasons are similar as discussed above: a) falling grades of silver ore (making mines less efficient and profitable); b) as it is a by-product of other metals, slowing production of other base metals affects silver as well; c) rising production costs (energy, fuel, labour) and; d) limited new discoveries of new deposits.
Summary:
Declining grades of silver, a lack of newly discovered deposits, as well as operational costs, are significant factors in the decline of global silver production. As there are many uncertainties related to mining production, Gold Proficiency makes no forecast about the future supply of silver.
Gold Proficiency
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