18 votes

Update: 16% of US Annual Silver Supply Just Vaporized…

How will this effect what's left of the laws of supply and demand?
16% of US Annual Silver Supply Just Vaporized…
4-13-13
http://silverdoctors.com/10-of-us-annual-silver-supply-just-...
*UPDATED
5 million ounces of annual silver supply and 500,000 ounces of annual gold supply have just been vaporized landslided.
Rio Tinto’s Kennecott mine in Utah- the US’ 2nd largest silver mine and world’s largest copper mine has just suffered a massive landslide which will likely shut down production at the mine for years as upwards of 1 billion tons of dirt and ore have collapsed into the basin.

16% of US annual silver production just vanished. Good thing there aren’t any physical supply issues in silver currently or anything…

According to Rio Tinto’s VP of Marketing Vania Grandi, Kennecott produces up to 5 million ounces of silver, and 1/2 million ounces of gold annually:
“We produce about 3 (million) to 5 million ounces of silver a year and 300,000 to 500,000 ounces of gold,” said Vania Grandi, vice president of marketing for the Precious Metals Copper Group at Rio Tinto — parent company of Kennecott Utah Copper Corp.

The total US mine output for silver in 2012 was 1,050 tons for 2012 or 30.6 million ounces, and US gold production was 230 tons, meaning Rio Tinto’s Kennecott accounted for upwards of 16% of total US silver supply, and 5% of US gold supply!!!

Astonishing Photos below:
http://silverdoctors.com/10-of-us-annual-silver-supply-just-...

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This all seems like a massive takedown

To humiliate the anti fiat currency crowd so the establishment can buy back precious metals for cheap

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the strangerr's picture

run!

Bingham Canyon Mine is the largest man-made excavation in the world. It has been in production since 1906, and features a pit almost one kilometre deep and 4km wide.
“This is something that we had anticipated,” Bennett told Deseret News.
“We knew the slide was imminent. We had relocated machinery, we had rerouted roads, we had rerouted utilities, we had rerouted buildings.”

The current Au/Ag liquidation is a god damn bloodbath. The timing of this PM take-down coinciding with the landslide is probably coincidence but it would be nearly impossible to hold down gold without silver. Shorts are covering as the ocean disappears – head for high ground.

Cyril's picture

There has been ANOTHER "landslide" and more odd coincidence

I do believe this one's only a coincidence. However there has been ANOTHER "landslide" and more odd coincidence lately, few have noticed, but wasn't stealth enough to escape some's attention:

http://www.dailypaul.com/281798/gold-silver-chart-analysis-w...

That other "landslide coincidence" is mentioned at minute 1, and 15 seconds or so.

Interesting coincidence, is it not?

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

SteveMT's picture

Silver is down another $1.22 tonight; at $24.63

Not only is the silver supply disappearing, so is the price!

Cyril's picture

Just commented with something in the precious metals thread.

Just commented with something in the precious metals thread.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Rio Tinto

Another Rothschild monopoly.

Luke 3:38
Isaiah 43:3-5

The pictures are

Incredible. Is this covered by some kind of insurance? They said they anticipated this collapse.

"Its easier to fool people than to convince them that they have been fooled."
Mark Twain

SteveMT's picture

In 2007, the company was valued at $147 billion.

It sounds like they have their own insurance policy. It's called money.
http://www.getnetworth.com/rio-tinto-net-worth/

“Movement along the north eastern wall had accelerated in recent weeks and pre-emptive measures were taken to relocate facilities and roads prior to the slide,” said Kennecott in a news release Thursday.
http://www.mineweb.com/mineweb/content/en/mineweb-base-metal...

It also sounds like they knew something was going to happen.

SteveMT's picture

The numbers were just updated. Now 16% loss of silver supply.

Is this upside down world, that increase in silver supply loss should drive the price of silver down even more.

You appear to be correct

10% or 0.4% ?

arsenal009 says:
April 14, 2013 at 12:16 AM
World Silver Supply in 2011 was 1 billion troy ounces.  Losing 4 million troy ounces is a loss of 0.4% of total supply…

No no no

The headline says 10% of annual US SILVER SUPPLY. The US mines 40 million oz a year, roughly....

The reason this is important, is that not only is the silver market tighter than it's been in 5 years.....the US Mint uses DOMESTICALLY produced silver to fulfill silver eagle demands...now it won't be able to. They'll have to source the silver somewhere else.

I think you are incorrect.

From what I remember only the Gold Eagle program has to use domestically produced gold for the coins.

The Walking Liberty coin program can source the silver from any place and usually get it the silver from Australia to strike the coins.

Cyril's picture

I've done this math,

I've done this math, too.

Correct. It's circa 1 trillion oz yearly supply for the world. However:

(rough ballparks)

The US alone produce only 40 millions oz, while they consume 120 millions (thus, the US MUST import the 80 other millions).

Mexico is a big producer, with 150 millions oz produced (15% of world production).

So... 4 millions oz is correctly 10% of the US production ONLY, and that's 3% of its consumption.

Of course, we're talking here above about all usages, across the board (industrial, bullion, jewelry, ...)

I first got myself familiar with the figures (with sources) back then:

http://www.dailypaul.com/259965/restoring-liberty-in-north-a...

'HTH,

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Cyril's picture

Stupid typo. Duh. Read of course:

Stupid typo. Duh. Read of course:

"It's circa 1 billion oz yearly supply for the world."

Also, it's never been a billion oz - closer to 900 millions only.

(thanks SIERRAHPBT)

Source:

http://www.silverinstitute.org/site/supply-demand/

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

no problem. I knew what ya

no problem. I knew what ya meant. Just didn't want the un educated to think something else.

Cyril's picture

Check this out:

Check this out:

http://www.dailypaul.com/281898/mike-maloney-todays-low-gold...

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

900 million ounces with mine

900 million ounces with mine production and recycling. not trillion.

Cyril's picture

Duly noted. Yes, the billion ounces is a myth

Duly noted. Yes, the billion ounces is a myth and gross approximation we should refrain from using...

"trillion" was of course a stupid typo.

Plus, I heard it's very possible the all times world production for silver may very well have peaked already, or is very near to...

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

this headline is still a bit alarmist

We tend to be geocentric and 10-16% of U.S. Silver supply sounds devestating - but important for us to look at the scope. If the worldwide supply is 900 million or 1 billion then we are still talking a half of a percent of the global supply.

I bet this happens all the time globally but we only hear the news because it happened here in America. But at the end of the day it just makes you realize how small of a footprint america has on total supply of silver.

Should not be down long.

Although the slide was much larger than anticipated, I would guess that limited production will commence within 3 - 4 months. This incident will give Rio Tinto an opportunity to expand the flanks of the pit to an extent that chances of such slides will be less likely in the future. I wish them well.

I Think You're Right

It looks like there's plenty of valuable ore contained in the slide itself. They can simply process the contents of the slide as they remove the material and alter the shape of the mine at the same time.

Geologists and safety run the game right now.

The immediate concerns right now are how to open the roads destroyed by the slide without further destabizing the area. Lots of infrastructure isolated. Once the plan is approved by Rio Tinto and gets signed off by MSHA and OSHA we should see a lot of people going back to work.

mountaincat's picture

This will slow

production for a while, but it won't close the mine permanently.
They may eventually break even as this material no longer needs to be blasted loose.
I noticed "vaporized" was edited from the source.
Thanks Steve.

They Move 400,000 tons of material a day at this mine

If the billion tons of new over burden all has to be moved it would take them 2500 days to move it.

I don't know how much needs to really be moved. Some of it I am sure can be move by scrapers and dozers. The 400,000 number I am sure is just what runs through their haul truck conga line.

Cave ins, landslides, other stuff is common in mining. It will sort itself out.

Beside Mexico sells lots of silver...so does south America

they'll make it up

by adding 10% paper silver.

Cyril's picture

Hmm... Make it 1000%, please.

Hmm...

Make it 1000%, please.

The paper/physical ratio is usually in the 100:1 ballpark, and at least since 2011, anyway :

http://youtu.be/xCCuLMgyUgY

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Cyril's picture

BUMP.

BUMP.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Cyril's picture

This actually happened two days ago

This actually happened two days ago and was predicted by monitoring a deforming slope they noticed, and followed also by seismographs:

http://blogs.agu.org/landslideblog/2013/04/12/the-unusually-...

I'm glad nobody got injured. Fortunately, science and technology helped to warn them guys this was coming to them. So, they prepared and rerouted a lot of stuff days before (cf. above link). Seems like the mine tries to resume its main operations ASAP (if only to keep the people with jobs).

What I find pretty interesting, though:

when you Google (or use other search engines) and get search results from the many news aggregators (e.g., Yahoo news)... the mine is VASTLY reported - with selective memory? - as being a "copper mine" first and foremost... sometimes with no other mentions whatsoever of the other metals it extracts.

Just check by and for yourself, of course.

Would there be some folks concerned with not scaring the public? Meh. "Just asking."

And yet, "anywayz"...

http://en.wikipedia.org/wiki/Bingham_Canyon_Mine#Operations

It's indeed confirmed to be in the ballpark of 4 millions ounces of silver yearly this mine usually produces, indeed circa 10% of US yearly production.

...

"à suivre..."

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

used to be heavily involded in mining

if you get lots of copper out of your mine...its a copper mine. Doesn't matter what else you pull out. Copper takes the lead. Not really sure why. I guess cause its the most plentiful and usefully. Lots of gold mines try to market themselves as gold mines, but as soon as people see how much copper they are pulling out they start telling them to stop calling this a gold mine, its copper.

Nothing new really.