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Silver in Australia
Nov. 22, 2022 01:40PM PST
Gold isn't all that glitters in the land down under — silver in Australia is a major industry, and the country is home to both large and small players.
When it comes to precious metals, Australia has long punched above its weight. In fact, the nation was born riding the wave of a gold rush.
Gold isn't all that glitters through — Australia is also a major global producer of silver. It's among the 10 top producers, and was ranked fifth in 2021, with 1,300 tonnes coming from the many operational mines in the country. By comparison, the world's top producer, Mexico, produced 5,600 tonnes that same year.
Other key players in the silver market are Peru, China and Russia, which produce more silver than Australia, and the US, Argentina and Bolivia, which produce less.
Australia is sitting on quite a lot of the precious metal, with the world's second largest reserves, behind only Peru.
According to Geoscience Australia, one of the country's first mines was a silver-lead mine near Adelaide. Since then, the entire continent has been looked over with a fine-toothed comb, with deposits identified in every state and territory and active mines in every jurisdiction except Victoria.
Overall, Australia is well-explored when it comes to silver, and since the mid-1800s it's had a constant stream of silver production. Aside from that, the country boasts metals-processing facilities in South Australia that separate the precious metal from its commonly mined counterpart metals, lead and zinc.
Silver companies in Australia
Those looking at the Australian silver market have a few options. There are many big players with interests in Australian silver, and plenty of smaller players for investors to consider researching as well.
Most silver comes from mines dedicated to other metals. For example, Glencore's (LSE:GLEN,OTC Pink:GLCNF) Mount Isa in Queensland produces mainly copper, zinc and lead, but silver is separated by the company's integrated processing streams. Glencore also operates the McArthur mine in the Northern Territory, which is primarily zinc, but between its copper and zinc assets, Glencore produced 6,521,000 ounces of silver in Australia in 2021 — over 180 tonnes.
Elsewhere, BHP (ASX:BHP,NYSE:BHP,LSE:BLT) produces a lot of silver at its Olympic Dam operation in South Australia. Perhaps best known for the production of uranium and copper, Olympic Dam also yields significant silver resources to the tune of 743,000 ounces in its financial 2022, just over 21 tonnes.
According to Geoscience Australia data from 2016, over 20 mines in Australia produced silver in that year, while there are dozens of other resources identified in each state.
A primary producer of silver is the Cannington mine in Queensland, where South32 (ASX:S32,OTC Pink:SHTLF), a company that was spun off from BHP in 2015, mines silver and lead. Cannington is a major producer, producing 12,946,000 ounces of silver in FY 2022, or 367 tonnes.
Tasmania has the Rosebery mine, which has seen 85 years of continuous operations and is currently owned by MMG (ASX:MMG,HKEX:1208). Rosebery, like all the others here, is polymetallic, and besides silver also produces copper, zinc, lead and gold. MMG also has the Dugald River mine in Queensland, which produces silver as well.
Getting into smaller companies, there are those like New Century Resources (ASX:NCZ), which restarted the Century mine in the Northern Territory for zinc and silver. Independence Group (ASX:IGO) also produces silver at its Jaguar project in Western Australia.
The future of silver in Australia
So, you get the picture — there's a lot of silver to be mined in Australia, and many companies have and will continue to take advantage of the ripe market.
It's worth noting that because silver operates both as a precious and an industrial metal, and is mined most often alongside base metals, it can be pulled in many directions. However, it traditionally follows (and lags behind) its precious metal sibling, gold, making it a valuable investment commodity to keep an eye on.
Looking forward, the future of the commodity in the land down under — especially given Australia's significant reserves and operator diversity — is likely to be bright.
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Securities Disclosure: I, Matthew Flood, hold no direct investment interest in any company mentioned in this article.
