Silver Mining
Out of all precious metals that are mined, I'd have to say silver interests me the most. Not only is silver one of the most mined METALS of all time, it's interesting to know that silver is only a by-product. What is that you say? This means that when miners go out to find a particular metal, silver would not be the first priority. With that being said, silver more times than not will come from a gold mine. In fact, the country of Mexico is the world's largest producer of silver. But guess what kind of mine produces the MOST silver in Mexico... You guessed it, a gold mine. Last year, Mexico produced over 150,000,000 ounces of silver alone according to Piran Mining Research. I will explore different aspects of mining as well as the many pros and cons that it entails.
INFOGRAPHIC: The looming copper supply crunch
Courtesy of: Visual Capitalist
Iron ore price rally just gave miners 'false hope'
The price of iron ore pulled back on Wednesday after worries about the longer term prospects for the $90 billion seaborne market for the steelmaking raw material resurfaced.The benchmark 62% Fe import price including freight and insurance at the Chinese port of Tianjin lost $1.20 or 1.9% to $60.90 a tonne according to data provided by The SteelIndex, a two week low.
High grade 65% Fe fines at the port of Qingdao fell back below $70 a tonne, down more than 6% in little over a week.
Benchmark prices are still 30% for the better since hitting record lows at the beginning of April.
The rally in iron ore was fuelled by declining stockpiles in China which consumes more than 70% of the 1.3 billion tonne seaborne trade.
Port stocks have declined for nine weeks in a row falling to its lowest level since late 2013 at 82 million tonnes. That's down from a peak above 110 million tonnes hit mid-year 2014.
Ironically, the recent strength could be the final nail in the coffin for prices in the longer-term, by encouraging, we think, false hope and higher production
Export disruptions from both ports in Brazil and Australia also acted as price support placing a constraint on iron ore import volumes which fell 12% in May from the previous month.
But Chinese steelmakers drawing on inventories may have been a temporary phenomenon. The FT quotes Morgan Stanley analyst Tom Price as saying the Asian nation's blast furnaces typically replenish stock of iron between February and May "but because of the uncertain outlook and a tight credit market they waited until the last moment this year":
“That’s what has driven the market — a delayed restocking event,” says Mr Price. “The mills have no choice. If they don’t produce more steel to meet what’s left of the seasonal peak in demand, they will have to shut down operations,” he adds.
But the clearest sign that the rally in iron ore may have been overdone is the fact that Chinese steel prices kept on falling even as fines prices climbed.
Indeed, the most-traded October rebar contract on the Shanghai Futures Exchange closed at a record low of 2,223 yuan ($362) per tonne on Wednesday.
"Steel prices in China have continued to fall despite the rally in iron ore prices in the last month, limiting the ability for steel mills to pay increasingly higher prices for ore," Australia and New Zealand Banking Group analysts said in a note quoted by Reuters.
That more low cost supply is coming on stream later this year from Australia – most notably from Gine Rinehart's new 55 million tonnes per year Roy Hill operation – does not bode well for the iron ore price going forward.
Capital Economics senior commodities economist Caroline Bain has the most devastating assessment of the longer term prospects for the industry:
"Perhaps somewhat ironically, the recent (relative) strength of iron ore prices could be the final nail in the coffin for prices in the longer-term, by encouraging, we think, false hope and higher production.
"This was seen recently as Australia-based Atlas Iron was able to raise financing and restart operations, after being forced to close mines earlier in the year owing to the slump in prices"
Capital Economics' house view of the iron ore price is a decline to $45 a tonne by the end of the year, more than 25% below today's price.
High grade 65% Fe fines at the port of Qingdao fell back below $70 a tonne, down more than 6% in little over a week.
Benchmark prices are still 30% for the better since hitting record lows at the beginning of April.
The rally in iron ore was fuelled by declining stockpiles in China which consumes more than 70% of the 1.3 billion tonne seaborne trade.
Port stocks have declined for nine weeks in a row falling to its lowest level since late 2013 at 82 million tonnes. That's down from a peak above 110 million tonnes hit mid-year 2014.
Ironically, the recent strength could be the final nail in the coffin for prices in the longer-term, by encouraging, we think, false hope and higher production
Export disruptions from both ports in Brazil and Australia also acted as price support placing a constraint on iron ore import volumes which fell 12% in May from the previous month.
But Chinese steelmakers drawing on inventories may have been a temporary phenomenon. The FT quotes Morgan Stanley analyst Tom Price as saying the Asian nation's blast furnaces typically replenish stock of iron between February and May "but because of the uncertain outlook and a tight credit market they waited until the last moment this year":
“That’s what has driven the market — a delayed restocking event,” says Mr Price. “The mills have no choice. If they don’t produce more steel to meet what’s left of the seasonal peak in demand, they will have to shut down operations,” he adds.
But the clearest sign that the rally in iron ore may have been overdone is the fact that Chinese steel prices kept on falling even as fines prices climbed.
Indeed, the most-traded October rebar contract on the Shanghai Futures Exchange closed at a record low of 2,223 yuan ($362) per tonne on Wednesday.
"Steel prices in China have continued to fall despite the rally in iron ore prices in the last month, limiting the ability for steel mills to pay increasingly higher prices for ore," Australia and New Zealand Banking Group analysts said in a note quoted by Reuters.
That more low cost supply is coming on stream later this year from Australia – most notably from Gine Rinehart's new 55 million tonnes per year Roy Hill operation – does not bode well for the iron ore price going forward.
Capital Economics senior commodities economist Caroline Bain has the most devastating assessment of the longer term prospects for the industry:
"Perhaps somewhat ironically, the recent (relative) strength of iron ore prices could be the final nail in the coffin for prices in the longer-term, by encouraging, we think, false hope and higher production.
"This was seen recently as Australia-based Atlas Iron was able to raise financing and restart operations, after being forced to close mines earlier in the year owing to the slump in prices"
Capital Economics' house view of the iron ore price is a decline to $45 a tonne by the end of the year, more than 25% below today's price.
Courtesy of: Visual Capitalist
Learn more at: Money Metals Exchange
How Silver is Mined
I found 2 very informative videos about how silver is mined. Check 'em out, you may learn a few things.
I'm not sure if I could ever get that deep into a mine because I am extremely claustrophobic.
As you can see, the mining process is very complex and cool at the same time. Basically, this is how all of our precious metals become what we all know them to be. (jewelry, bullion, currency, etc.) One of the additional reasons why I tend to love silver is its overall usefulness. I think it's extremely innovative in its use in industry and medical particularly.
Infographic courtesy of The Mining Association of British Columbia (MABC), Canada, and The Mining Suppliers Association of BC (MSABC) partnered with Visual Capitalists.
The Holden Mine Cleanup Video
by Mining.com
(Michael McCrae's travel was paid for by Rio Tinto)
Mining.com recently took a media tour of a $200-million mine cleanup in Washington State. The mine hasn't been used in over 50 years.
The World's Largest Diggers
by Mining.com
Has Mount Polley Mine Leak Ended
Well... according to Mining.com the tailings pond leak at Mount Holly has FINALLY stopped leaking. I don't think I would be satisfied by this news knowing that it had been leaking thins entire time. There's no telling what that water condition REALLY is now. Of course the inspectors tell us one thing, but what's the actual truth?