Silver is a metallic chemical element that has a wide variety of uses, primarily in industry, jewelry and decor. It is extremely useful in cell phones, laptops and solar panels because of its thermal and electrical conductivity.
Global fabrication demand for silver dropped slightly in 2012, to 846.8 million ounces, according to the Silver Institute. Supply of the commodity from above-ground stocks also fell 7.5 percent that year, to 261.3 million ounces. Still, the world’s leading silver mines continued to operate successfully. The top three for 2012 are located in Australia, Mexico and Russia.
Cannington mine, Australia
The Cannington mine is a fly-in, fly-out mining and processing operation located in Northwest Queensland, Australia. It produced 32.23 million ounces of silver in 2012, the most of any mine in the world, as per the Silver Institute. The deposit was discovered in 1990, and full production was achieved in 1997. Its life expectancy is 25 years and it has proven and probable silver reserves of 24 million tons. Cannington also contains reserves of lead and zinc.
The mine is wholly owned and operated by BHP Billiton (NYSE:BHP,ASX:BHP,LSE:BLT), a major producer of commodities, including aluminum, copper, silver and uranium. The company has been operating since the mid-1800s.
Cannington was BHP’s sixth-most profitable mining operation in 2011 and contributed $1.19 billion to the company’s earnings before interest and tax, The Australian reported. In comparison, the project’s net operating base was only $202 million. As such, analysts place the value of the Cannington mine as high as $5 billion.
Fresnillo mine, Mexico
In second place is the underground Fresnillo mine, located in Mexico, northwest of Zacatecas. The asset, which its operator, Fresnillo (LSE:FRES), says is the world’s largest primary silver mine, produced 26.38 million ounces of silver in 2012.
Fresnillo notes on its website that it is the world’s largest primary silver producer and the second-largest gold producer in Mexico. The Fresnillo mine is its flagship property, but overall, the company has seven mines in operation throughout Mexico, plus three projects in the developmental stage.
The Fresnillo mine has been in near-continuous operation since 1554 and has a long tradition of silver mining, states the company. Its total reserves include 308.5 million ounces of silver and 733,000 ounces of gold, and its mine life clocks in at 12.5 years. The average ore grade of the silver at the mine is 281 grams per ton.
Dukat mine, Russia
The Dukat mine is the largest silver deposit in Russia and the third-largest in the world. It was discovered in 1965 and now operates in conjunction with four others to form the Dukat hub. The Dukat hub, officially formed in 2008, is located in the Magadan Region of the Russian Far East and is the flagship operation of Polymetal International (LSE:POLY).
The Dukat mine — combined only with output from the hub’s underground Goltsovoye silver mine — produced 15.5 million ounces of silver in 2012, according to the Silver Institute. As a whole, during the 2012 fiscal year, the Dukat hub produced 19.2 million ounces of silver. The hub’s production timeline is expected to extend through 2023.
Dukat’s operating company, Polymetal, is a leading gold and silver mining group that works on assets in Russia and Kazakhstan. It first acquired the Dukat mine in 2000, and open-pit mining began at the site in 2001. Citigroup reissued its neutral rating on shares of Polymetal in a report sent to investors on August 12.