Mexico, Peru, China: How Three Countries Decide the Silver Supply Curve

Over half of global silver output comes from three countries, each with very different geology, politics, and cost structures. The supply outlook hinges on what happens inside their borders.

Silver supply isn't a global average. It's the sum of decisions made in three capitals and a handful of mining districts.

Anyone modelling future supply without grasping that concentration is guessing.

Mexico: the volume leader

Mexico produced roughly 200 million ounces in 2024, about a quarter of global mine supply. Fresnillo and Peñoles dominate output, with mines clustered in Zacatecas and Durango. Mexican silver is mostly primary or co-product, meaning silver economics actually drive production decisions there.

Peru: byproduct kingdom

Peru contributes around 105 million ounces annually, second-largest globally. Most Peruvian silver is byproduct from copper, lead, and zinc mines. That structural feature means Peruvian silver supply barely responds to silver prices; it follows base metal cycles instead. When copper booms, silver floods out of Peru regardless of what silver is doing.

Mexico: ~200M oz/year, mostly primary, sensitive to silver price
Peru: ~105M oz/year, mostly byproduct, sensitive to copper
China: ~95M oz/year, opaque mix of primary and byproduct, partly state-directed
Combined share of global supply: roughly 50%
Top 10 mines globally produce more than the bottom 200 combined

'You can have a perfect silver thesis ruined by a copper bear market in Peru.' — mining analyst at a London-based fund

China: the wild card

Chinese silver production is harder to model. Output figures from the China Nonferrous Metals Industry Association don't always reconcile with corporate reports, and exports are managed via VAT rebates that change without warning. China consumes most of what it mines, primarily for industrial and solar use, leaving the global merchant market more dependent on Mexico and Peru than the raw production numbers suggest.

The political risk overlay

Mexico's mining reform debates, Peruvian community blockades, and Chinese export policy each represent supply tail risks that don't show up in baseline forecasts. The 2023 Las Bambas blockades in Peru pulled an estimated 8 million ounces of silver out of the merchant market for months. Such episodes are not rare.

Diversification doesn't help much either. The next tier of producers — Chile, Russia, Australia, Bolivia, Poland — together produce less than Mexico alone. There is no quick substitution if any of the top three stumbles.

Bottom line: silver supply forecasts are really three country forecasts in a trench coat. Watch Mexican mining policy, Peruvian copper, and Chinese export quotas before you trust any global model.