World’s 2nd Largest Silver Mine Shut Down

The world’s second largest primary silver mine, Tahoe Resources Escobal Mine, was forced to shut down operations in Guatemala by a ruling from the country’s Supreme Court. This was due to a provisional decision by the Guatemalan Supreme court in respect of a request by CALAS, an anti-mining group, for an order to temporarily suspend the license to operate the Escobal Mine until there is a full hearing. (picture courtesy of Tahoe Resources)

While this story has been out for a few days, I believe there is a great deal of misinformation on the Mainstream and Alternative media about the current situation and future outcome of Tahoe’s flagship Escobal Mine. Some analysis suggests that this is just a small speed-bump for Tahoe, so when they are able to address disputed regulatory issues, production and profits will shortly return once again.

However, there also seems to be a another side to the story that could cause more problems for Tahoe with a much longer suspension time than the company is publicly stating. For example, the following was published in the article… Tahoe Resources forced to halt Escobal mine in Guatemala:
A Shutdown Of The Escobal Mine, Ranked #2 In The World, Would Remove 21 Million Oz Of SupplyAccording to the 2017 World Silver Survey, Tahoe Resources Escobal Mine ranked #2, behind Fresnillo PLC’s Saucito Mine in primary silver production in 2016.  Here are the top five producing primary silver mines in 2016 (Moz – million ounces):

1. Saucito (Mexico) = 21.9 Moz
2. Escobal (Guatemala) = 21.2 Moz
3. Dukat (Russia) = 19.8 Moz
4. Cannington (Australia) = 18.2 Moz
5. Uchucchacua (Peru) = 16.2 Moz

Furthermore, the data in the 2017 World Silver Survey reports that a total of 265 million oz (Moz) of primary silver was produced last year.  Thus, the Escobal Mine represents 8% of total global primary silver mine supply.  If Haywood Analysts are correct that production at Escobal may not resume in 2017, than the mine is likely to lose nearly half of the 20-21 Moz forecasted for 2017.
While this is not a great deal of silver compared to total world silver supply of 886 Moz (in 2016), if the Escobal Mine is shut for a longer period of time, or indefinitely, it could impact the silver market over the next few years.

Credit to srsroccoreport.com

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