Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
2016 has been a good year for precious metals, particularly silver and gold, but when comparing the two of them the grey metal has clearly outperformed bullion — it is up 40% to date, while its sister metal has only gained about 28%.
Silver is up 40% to date, while gold has only gained about 28%.
For some such as Michael Steinmann, chief executive officer of Pan American Silver (TSX:PAA) (NASDAQ:PAAS) — the world’s second largest producer of the metal —, silver will continue to crush gold into 2017, partly thanks to its use in solar panels and electronics.
Speaking to CNBC’s Squawk Box Wednesday, Steinmann acknowledged that while the US Federal Reserve’s potential move to hike interest rates by December will have an immediate effect on the metal, its long-term fundamentals remain strong.
“Every phone, every screen, every light switch contains silver,” he said. “In the future, a focus on clean energy will help boost silver prices,” Steinmann noted.
An increasing focus on clean energy will help boost silver prices, says Michael Steinmann, CEO of Pan American Silver.
Investors have flocked to the metal in recent months, with hedge funds expanding their bullish bets on silver to an all-time high in May, as reported by Bloomberg.
Demand is not expected to recede any time soon, but quite the opposite. According to data compiled by GFMS for the Washington-based Silver Institute, about half of global silver consumption last year was related to the metal’s industrial use, including smart phones, flat-screen TVs, solar panels and alloys and solders.
“Silver demand had a phenomenal 2015 with retail investment and jewellery fabrication both reaching all-time highs,” wrote Frank Holmes of US Global Investors last month.
And as average incomes surge in top consuming countries, such as India, and high-technologies becomes more and more available to the masses, demand for silver is expected to increase even further, pushed as well by new uses being found for the metal’s anti-bacterial and reflective properties in everything from hospital paints to long-life batteries and flexible screens.
Vancouver-based Pan American Silver has mines and other projects in the United States, Mexico, Peru, Bolivia and Argentina.
Courtesy of Kitco Metals.
6 Comments
Auldenemy
‘And as average incomes surge….’ Can the author tell us where in the West average incomes are surging? They have been static in the UK for years, ditto Europe. From my reading of American politics, economics and CB policies I don’t get the impression average incomes are surging there either. The only surging going on is in the highly manipulated S&P500, which only enriches the already rich.
Jesper Madsen
Well the west is only some 10% of the world – actually the US with 300 mio ppl is somewhat 3% of the population ..
ThaOracle
What if I were to tell you ……… anything?
Alexandre Pepin
lol
Phil Blank
I should have bought it back in the 90s when it was about $5.00 an ounce!
Phil Blank
The Many Uses of Silver
geology.com/articles/uses-of-silver/