Looking first at the headline figures, the COO mine production total for 2021 stood at 15,749t, down 9% y/y.

However, this includes a small figure for Russia, which was reported to LBMA for their COO survey, before LBMA accreditations were removed. Excluding this gives a global COO total of 15,624t, for a y/y change of -5% (i.e. excluding Russia for 2020 for a like-for-like comparison). This compares with the Metals Focus total for 2021 of 25,741t, which was up 6% y/y; excluding Russia their total was 24,529t. For recycling, the COO data for 2021 totals 12,982t, but excluding Russia this comes to 12,899t, up 35% y/y. Metals Focus’ recycling is far more modest at 5,453t also up 6% y/y; what follows explains the apparent differences between the two methodologies.

Silver Recycling: A Comparison of LBMA and Metals Focus Data, Selected Markets, 2021

Tonnes LBMA MF MF less LBMA
China 1,626 975 -651
Hong Kong 1,702 5 -1,697
Japan 1,950 296 -1,654
Canada 151 47 -104
United States 1,236 1,328 92
Germany 1,855 302 -1,553
Belgium 176 20 -156
Switzerland 430 9 -421
Global Total* 12,982 5,453 -7,529

Source: Metals Focus, LBMA; *Includes Russia

In keeping with last year’s COO report produced by Metals Focus, it can be quite challenging to directly compare LBMA silver LSM and recycling data with figures collated by Metals Focus, for several reasons. First, the latter’s scrap supply data includes the recovery of silver from spent ethylene oxide (EO) catalysts, much of which is treated by non-GDL operations. This dominates Metals Focus’ industrial scrap supply, which in 2021 totalled 2,894t. While other end-of-life industrial products are often processed by GDL operations (including e-scrap), which will be part of the COO silver recycling dataset, this accounts for less than 20% of the consultancy’s industrial scrap series.

Global Silver Totals, 2021

Tonnes LBMA y/y (%) MF y/y (%) MF less LBMA
Mining* 15,624 -5% 25,741 6% 10,131
Recycling* 12,899 35% 5,453 6% -7,529

Source: Metals Focus, LBMA; *LBMA COO data excludes Russia

The second issue concerns how the processing of by-product silver mine supply is classified. In 2021, 57% of global silver mine supply was derived from base metals (primarily in the form of concentrates), totalling 14,667t. When a smelter produces silver doré from this concentrate and delivers this to a GDL refiner, the latter may report the smelter as the country-of- origin, rather than where the concentrate was originally mined, or classify it as recycling as it is not sourced directly from a mine. Furthermore, for some GDL operations with base metal smelters it may also be difficult, because of co-mingling, to differentiate between precious metals that are recovered from mining concentrate as opposed to industrial scrap.

The above treatment of base metal mining concentrates helps explain why the COO recycling total of 12,982t far exceeds Metals Focus’ global scrap supply figure of 5,453t, even though the latter includes a sizeable EO component. Related to this point, the COO silver mine supply figures will typically reflect primary silver-bearing doré and by-product gold mining. In 2021 according to Metals Focus, these two components totalled 7,088t and 3,986t respectively, compared with the COO total of 15,749t.

Looking at some of the individual country figures highlights this disparity. For example, the Australian silver COO data stands at 834t of LSM and 302t of recycled silver, against 1,330t and 45t respectively for Metals Focus. Breaking this down further, Metals Focus reports a combined 601t of silver recovered from gold and silver doré in Australia, and 729t from base metals mining. The latter may explain the higher COO Australia recycling figure, but it may also be the case that this includes the melt of some 1,000oz GDL bars. Even so, the combined COO LSM/recycling figure of 1,136t still falls short of Metals Focus’ silver mine supply total for Australia, by 193t. This may either reflect silver that was refined by non-GDL refiners (notably in Mainland China), or the reporting by the GDLs may reflect where the smelter that produces the intermediate silver doré has instead become the COO , or it could have been mis-classified as recycling.

Looking at Bolivia, the COO LSM of 300t is relatively close to Metals Focus’ primary silver production of 250t. In contrast, none of the consultancy’s silver derived from by-product mining of 1,041t for Bolivia is attributed to that country in the COO dataset. This may be an example of where a GDL refiner that operates a smelter treats base metal mining concentrate and industrial scrap, for example in Japan, where the COO data shows 1,950t of silver recycling for that country, whereas Metals Focus estimates Japanese silver scrap supply at just 296t.

The variance for Mexico is also worth highlighting (COO LSM of 3,364t; Metals Focus mine production of 6,097t). The COO total is a very close match for the consultancy’s primary silver production figure for Mexico of 3,413t. What appears to be excluded from the COO total is silver extracted from by-product mine supply, which Metals Focus estimated at 2,684t in 2021. As touched on above, some of this material is likely to be captured in the COO recycling data, where GDL refiners operate a smelter, while some will fall outside the LBMA survey, being treated, for example in China by non-GDL operations.

Staying with North America, the fact that the COO and Metals Focus silver recycling figures for the US (1,236t and 1,328t respectively) closely match for 2021 is entirely coincidental. The latter includes a sizeable allowance for EO recycling, which is not captured in the COO survey. Instead, the former is likely to include the melt of some GDL and CME bars, as well as a modest volume of process scrap collected from silver jewellery manufacturers. It may also reflect the overseas treatment of silver containing base metal concentrates, which in 2001 in the US generated 347t of silver. However, it is still interesting to see a relatively low COO LSM total for the US, of 438t, given that domestic primary silver mine production stood at 553t in 2021 (according to Metals Focus).

Silver Mine production: A Comparison of LBMA and Metals Focus, Selected Markets, 2021

Tonnes LBMA Mine Production MF Primary/ Gold By- Product MF Base Metals By-Product Total MF less LBMA
Mexico 3,364 5,125 971 2,732
Peru 1,614 1,198 2,394 1,978
Chile 483 129 1,152 798
Bolivia 300 250 1,041 991
Argentina 551 707 - 156
United States 438 662 351 575
Russia na 854 358 1,212
Australia 834 601 729 496
Global Total 15,763 11,095 14,653 9,985

Source: Metals Focus, LBMA