Historical and current mining of gold and silver

Extraction of gold and silver in mines

To date, about 0.17 million tons of gold and about 1.7 million tons of silver have been mined , so gold production is one-tenth of silver production.

Historical mine production of gold and silver

Source:  According to data from Markt-Daten.de (Internet: markt-daten.de, retrieved 01.10.2012); Silberinfo.com (2009), World Gold Production - Historical (Internet: www. silberinfo.com/gold/bilanz.html, retrieved 01.10.2012); Silberinfo.com (2009), World Silver Production - Historical (Internet: www.silberinfo.com/silber/bilanz.html, retrieved 01.10.2012).

After the end of the Roman period (500 AD), the ratio of precious metal production changed significantly in favor of silver (from 1 to 7 to 1 to 82). In the Middle Ages, Germany was the most important European silver producer. Of particular importance were the silver deposits in the Ore Mountains along the famous Silver Road.[1] Silver mining was practiced in the silver city of Freiberg, among others, which experienced a brilliant rise as a result.[2] It was not until 1913 that silver mining in the Ore Mountains was discontinued. Silver mining was also carried out in the Harz mountains (Goslar), in the Siegerland region and in the southern Black Forest (Belchen and Feldberg), and gold was washed out of the Rhine (Rheingold).

Finally, the discovery of America by Christopher Columbus was of decisive importance for the further development of precious metal mining. 

Many adventurers and desperadoes then set out from the Iberian Peninsula overseas to capture gold and silver.[3] In particular, the legend of the legendary Eldorado, a city supposedly sunken in the jungle of the Amazon along with its gigantic treasures of precious metals, motivated them to explore South America.

When finding Eldorado was a long time coming, the conquistadors instead robbed the gold of the Aztecs and captured the silver from the productive mines of Latin and Central America, such as the famous mines of Potosí in Bolivia, where the Incas had previously mined precious metals. They took the gold and silver to Spain and Portugal, from where it spread throughout the European and Asian continents.

From the end of the 16th to the end of the 18th century, the ratio of gold to silver mining was 1 to 40. Since the two precious metals were used primarily as a means of payment in the form of coins during this period - as they were in the Middle Ages - this proves that silver, and not gold, was historically the most important and widely used currency. While public perception today tends to attribute this role to gold, this does not correspond to the historical facts.

Precious metal mining experienced an explosive boom in the 19th century. On the demand side, this was accompanied by the start of industrialization and the associated increase in prosperity, as well as the worldwide rise in population figures. Gold and silver goods became increasingly popular, as did gold and silver jewelry, and the first industrial applications were added. On the supply side, improved mining technologies and new precious metal discoveries ensured satisfaction of the rising demand.(Excursus Silver Rush)

Spectacular gold discoveries in California's Sacramento Valley, about halfway between Virginia City and San Francisco, led to the famous Gold Rush of 1849 in the mid-19th century.[4] In 1897, another legendary gold rush occurred in Alaska, on the Klondike River, which was given the name Bonanza Creek (literally translated: gold pit creek).[5]

Development accelerated in the 20th century: Compared to the 19th century, the amount of gold and silver mined increased by a factor of eight or five. At the beginning of the 21st century, the production volumes were twice as high as the average of the 20th century. From 2001 to 2011 alone, 2.2 times as much gold and 1.4 times as much silver was mined as in the entire 19th century.

Gold production initially declined after the turn of the millennium: From 2001 until 2008, production volumes fell by an average of 2% per year despite sharply rising gold prices. It was not until 2009 that gold production began to rise again, but in 2011 it was still only 6% above the 2001 level.

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Gold production since 1900

Source:  Own presentation based on data from U.S. Geological Survey (2010), Gold Statistics (Internet: minerals.usgs.gov/ds/2005/140/gold.pdf, retrieved 01.10.2012); from the year 2000: World Gold Council (Internet: de.wikipedia.org/wiki/Gold/tables_and_charts or research.gold.org/supply_demand, retrieved 01.10.2012).

The top ten gold producing countries

In 2011, the top ten gold producing countries, accounting for two-thirds of global production, were China (14%), Australia (10%), the U.S. (9%), Russia (7%), South Africa (7%), Peru (6%), Canada (4%), Indonesia (4%), Ghana (4%), and Uzbekistan (3%).[6] Accordingly, South Africa accounted for only 7% of global production in 2011, with less than 0.2 thousand tons; in 1970, it had accounted for two-thirds, with 1,000 tons. Since the turn of the millennium, production has also declined significantly in the USA and Australia.

The following chart shows silver mine production since 1900. The slumps caused by the world wars and the world economic crisis can be clearly seen. The average annual increase was 2.2% between 1947 and 1980, and 2.6% between 1980 and 2011.

Silver production since 1900

Source:  Own presentation based on data from U.S. Geological Survey (2010), Silver Statistics (Internet: minerals.usgs.gov/ds/2005/140/silver.pdf, retrieved 01.10.2012); as of 2000, based on data from the World Silver Survey (Internet: www.gfms.co.uk or silverinstitute.org/supply_demand.php, retrieved 01.10.2012).

The next chart shows the annual changes in mine production of silver. The curve is reminiscent of the pattern of an oscillograph. Clear trends are difficult to discern, so short-term trends should not be overinterpreted.

The ten largest silver producing countries accounted for 91% of global silver production in 2011. The once most important producing countries, the USA and Canada, which in 1970 each contributed 15% to global production, were just among the ten largest silver producers in 2011, with 5% and 3% respectively. By contrast, Peru and Mexico, the next largest producing countries in 1970, were able to increase their share.

Two countries in particular expanded: while China produced no silver at all in 1970, its share was already 17% in 2011, and Chile increased its share from 1% to 6%.

Rates of change in silver production since 1900

Source:  Own presentation based on data from U.S. Geological Survey (2010), Silver Statistics (internet retrieved 01.10.2012).

The ten most important silver producing countries in 2011

Source:  Own calculations based on data from U.S. Geological Survey, Silver Statistics and Information (Internet: minerals.usgs.gov/minerals/pubs/commodity/silver, accessed 01.10.2012).

The table after this paragraph shows the ten companies with the highest silver production worldwide in 2011. In total, these ten companies, among which there is not a single company for which silver is the main product, accounted for 35% of global silver production.

Companies with the highest silver production in 2011

Source:  Own calculations based on data from the World Silver Survey (internet retrieved 01.10.2012). - ¹⁾ Share of global mine production in 2010 in %. - ²⁾ The company does not own any of the 15 largest mines in the world; all of its mines yielded less than 170 tons of silver in 2010.

The extraction of gold and silver from mined ores first requires that they be crushed. Gold then undergoes chemical-technical processing, although the amalgam method, which was already known in the Middle Ages, is hardly used today due to mercury contamination; instead, it is separated using cyanide leaching and electrolytic processes, and silver is extracted from ores using metallurgical processes such as cyanide leaching or sintering.[7]