Silver & Gold: Dependence on Energy Below is an excerpt and a link to an excellent article on past,present and future PM mining and the dependence on energy to extract silver and gold from the ground.
"In order for the future global silver production to grow, it must predominantly take place in the base metal mining industry. When the world oil supplies start their inevitable decline in the next several years it will also force global GDP to fall as well. As the global GDP declines, so will the supply of base metals such as copper, lead and zinc. Thus, future silver supply is at more risk than gold because 70% of its production comes from the mining of base metals.
In contrast, 80% of the world's gold production comes from primary mines. When the world finally succumbs to the gravity of the hundreds of trillions of dollars in derivatives reverting back to their original value of zero, gold will become the center of banking and trade. Because the majority of gold comes from primary mines, it makes perfect sense for the world to focus its energy sources on the very metal that will be in the forefront of global banking industry.
That being said, this is not at all negative for silver. Silver is still the second best monetary metal to gold. In addition, as future base metal production declines (along with it silver production), this would force the price of silver to increase in response to its enhanced rarity.
I would also imagine this will motivate the mining industry to enlarge its number of primary silver producers as well as increase its overall percentage of primary silver production. We must remember, the most efficient way to use less energy to extract silver is the mining of underground reserves with high ore grades. That is why it makes perfect sense that these underground high ore grade mines will take a premium in the future -- basically, they utilize a higher EROI in their production.
Final Remarks
It is simply amazing to see professional engineers and geologists planning and designing technical mining reports for operations that are based on 25, 50 and 100 year life spans (such as the Alaska Pebble Project) without a comprehensive consideration of the future energy supply.
Future world energy constraints will impact the production of silver in a larger degree than gold. As the world finally catches on to the fact that silver production will decline greater in percentage than gold, its value will more than likely increase to a greater extent than gold."
https://www.tfmetalsreport.com/blog/4061/guest-post-future-silver-suplly-more-risk-gold