The World's Cumulative Gold and Silver Production
Part 1
This is the first installment of a planned 7-part series:
Part 1 - The World's Cumulative Silver and Gold Production. Documenting the total amount of silver and gold produced since recorded history.
Part 2 - The Silver Deficit. Documenting the silver production/consumption deficit since 1939.
Part 3 - The Real Silver Deficit. Answering the questions of "How much silver has been consumed by industry?" and "In what potentially marketable accessible forms does it remain?"
Part 4 - The Illogical Performance of the Gold to Silver ratio Since 1848. Looking at silver and gold's production growth since 1848, and contrasting both this measurement and that of their shrinking ratio of comparative rarity to the ever-widening market price ratio between the two.
Part 5 - Why the Depressed Prices? A brief look at the amount of silver stockpiles held in the early 1900's, as well as some interesting quotes dating back several decades that made the bullish case for silver, unwittingly or not.
Part 6 - What Happened in 1980? Did production increase? Did extraordinary amounts of scrap silver come to market? -- What to expect in any future stratospheric price rise.
Part 7 - The Future of Silver. An overview of silver's fundamentals, focusing in on industrial usage and it's growing number of applications. Also included will be my own short and long-term outlook, together with price predictions for 2006 and beyond.
Preface
I'm a relatively new face in the gold and silver bug community, and while attempting to conduct research of my own I found it frustrating that there did not seem to be any sort of comprehensive data source dealing with the subjects of silver and gold production and consumption. In an effort to change this, I've spent several hundred hours this past month perusing through thousands of pages of documents (namely, the Minerals Yearbooks [1933-2004]). It is my hope that this series of articles will serve as reliable reference material for all future writers, researchers, believers and skeptics, saving them all much time and effort better spent breaking new ground in the ever thickening plot behind:
Those precious two,
Of gold and silver hue,
"You missed them too?"
"Boy, how they flew!"
Cumulative World Silver Production
Source 1
USGS (United States Geological Survey)
http://pubs.usgs.gov/of/2004/1251/2004-1251.pdf
"Total silver production from pre-history till 2001 is estimated by the U.S. Geological Survey (USGS) to have been about 1.26 million metric tons (Mt), one half of which was mined in the last 62 year period." (Page 8)
1.26 Mt x 32,150.75 ounces/ton = 40.51 billion ounces + 2.46 billion
(production from 2001-2005) = 42.97 billion ounces
Cumulative Silver Production = 42.97 billion ounces
Source 2 (multiple)
The History of Silver (3000BC-1493AD)
| Time Period | Annual Production | Period Total (est.) |
|---|---|---|
| 3000BC - 600BC | 0.75 million ounces | 1.8 billion ounces |
| 601BC - 1000AD | 1.5 million ounces | 2.4 billion ounces |
| 1001AD - 1492AD | 7 million ounces | 3.4 billion ounces |
| 7.6 billion ounces total |
Bureau of Mines Minerals Yearbook (1493-1930)
(Billions of Ounces)
| Total World Production | |
|---|---|
| Time Span | Total Amount |
| 1493 - 1930 | 14.97B |
Bureau of Mines Minerals Yearbook (1931-1993)
The Silver Institute (1995-2004)
(millions of ounces)
| Year(s) | World Production* | Year(s) | World Production* | Year(s) | World Production* |
|---|---|---|---|---|---|
| 1931 | 195.6 | 1956 | 222.4 | 1980 | 341.4 |
| 1932 | 164.9 | 1952-6 | 220.7 avg. | 1981 | 361.6 |
| 1933 | 169.2 | 1957 | 231.1 | 1982 | 383.0 |
| 1934 | 190.4 | 1958 | 239.0 | 1983 | 392.0 |
| 1935 | 215.9 | 1959 | 221.9 | 1984 | 415.2 |
| 1936 | 250.2 | 1960 | 240.2 | 1985 | 412.3 |
| 1937 | 276.7 | 1961 | 231.8 | 1986 | 419.0 |
| 1938 | 267.7 | 1962 | 242.4 | 1987 | 445.1 |
| 1939 | 266.0 | 1963 | 250.8 | 1988 | 460.8 |
| 1940 | 275.7 | 1964 | 249.5 | 1989 | 474.5 |
| 1941 | 267.0 | 1965 | 251.0 | 1990 | 485.7 |
| 1942 | 249.6 | 1966 | 253.1 | 1991 | 503.9 |
| 1943 | 217.0 | 1967 | 266.7 | 1992 | 473.8 |
| 1944 | 186.2 | 1968 | 275.3 | 1993 | 453.0 |
| 1945 | 157.0 | 1969 | 290.5 | 1994 | 446.9 |
| 1946 | 129.0 | 1970 | 301.7 | 1995 | 483.0 |
| 1947 | 156.8 | 1971 | 294.7 | 1996 | 491.0 |
| 1948 | 173.2 | 1972 | 301.5 | 1997 | 520.7 |
| 1949 | 173.8 | 1973 | 308.0 | 1998 | 544.0 |
| 1950 | 203.0 | 1974 | 294.9 | 1999 | 548.5 |
| 1951 | 199.1 | 1975 | 294.3 | 2000 | 587.3 |
| 1952 | 216.8 | 1976 | 316.4 | 2001 | 611.8 |
| 1953 | 216.4 | 1977 | 340.3 | 2002 | 607.4 |
| 1954 | 214.2 | 1978 | 344.4 | 2003 | 611.2 |
| 1955 | 223.4 | 1979 | 346.0 | 2004 | 634.4 |
| Total | 5.2535B | Total | 7.7114B | Total | 12.1075B |
| Total (1931-2004) | 20.07 billion ounces | ||||
| Note: I noticed that reported production totals underwent slight variations as the years passed. | |||||
*Free World:
In the years 1939-1991, total world production numbers are not exact in nature due to a lack of data coming from the communist world:
- Listed in order of estimated silver production, the Communist World consisted of: U.S.S.R, East Germany, Czechoslovakia, Romania, China, North Korea, and Poland.
Russia contributed the vast majority of the above group's silver production, mining an estimated 80% of their cumulative total (25M ounces).
- Russia's share increased to 38M ounces/year by 1970 (others remain much the same)
- Russia's share increases to 43M ounces/year by 1975 (others remain much the same).
- Russia's share increases to 46M ounces/year by 1979 (others remain much the same).
- Russia's share increases to 48M ounces/year by 1989 (others remain much the same).
- Beginning in 1991 Russia's share begins to decrease, and in 2004 they produced only 37.9 M ounces.
All these numbers are added to the above total, I just wanted to make this issue more clear. In truth, I wouldn't be surprised if the above world cumulative total should actually be a little less due to a possible over estimation of communist Russia's mining productivity, as is evidenced by their declining production numbers since the fall of the Berlin Wall in 1991.
Compiling all of the above data:
| Time Period | Production |
|---|---|
| 3000BC-1492AD | Est. 7.6 B |
| 1493-1930 | 14.97 B |
| 1931-2004 | 20.05 B |
| Grand Total | 42.62 billion ounces |
Cumulative Silver Production = 42.62 billion ounces
Source 3 (multiple)
From: "Silver Products and Production". Encyclopedia Britannica, 1974 Ed.
"Total world production up to 1970 was just under 30 billion accumulated ounces." (Let's use 29.5B)
If we add to this the 15.25B ounces that were produced since then (1970-2004) based upon the data from Source 2 then...
Cumulative Silver Production = 44.75 billion ounces
Source 4 (multiple)
The History of Silver (3000BC-1492)
| Time Period | Production |
|---|---|
| 3000BC-1492AD | Est. 7.6 B |
Continuing from The History of Silver (1493-1900)
| Time Period | Annual Production | Total Production |
|---|---|---|
| 1493-1499 | Est. 10 million ounces | 0.06B |
| 1500-1600 | Est. 16 million ounces | 1.60B |
| 1601-1800 | Est. 20 million ounces | 3.98B |
| 1801-1875 | 30 million ounces | 2.25B |
| 1876-1899 | 120 million ounces | 2.88B |
| Total | 10.77B |
United States Geological Survey (USGS) Data
The Silver Institute (1995-2004)
| Time Period | Total Production |
|---|---|
| 1900-2002 (USGS) | 29.3B |
| 2003-2004 (Silver Institute) | 1.25B |
| 1900-1994 (USGS) | 24.8B |
| 1995-2004 (Silver Institute) | 5.64B |
| Total 1* (1900-2004) | 30.55B |
| Total 2** (1900-2004) | 30.44B |
| Combined Average of Totals 1 and 2 | 30.50B |
| *Total 1: Using Silver Institute data for years 2003-2004 **Total 2: Using Silver Institute data for years 1995-2004 | |
Compiling all of the above:
| Time Period | Total Production |
|---|---|
| 3000BC-1492AD | 7.6B |
| 1493-1900 | 10.77B |
| 1900-2004 | 30.50B |
| Grand Total | 48.87B |
Cumulative Silver Production = 48.87 billion ounces
Source 5:
Marion Butler estimated in 1999 that a total of 40.4 Billion ounces of silver had been produced since 3000BC. If you add to this the amount of silver produced between 1999 and 2004 (3.05B) you get...
Cumulative Silver Production = 43.50 billion ounces
A Complete Summation of the Silver Data
| Source # | Cumulative World Production |
|---|---|
| 1 | 42.97B |
| 2 | 47.64B |
| 3 | 44.75B |
| 4 | 48.87B |
| 5 | 43.50B |
| Combined Average | 45.552B |
Average Cumulative World Silver Production = 44.542 billion ounces
Cumulative World Gold Production
http://minerals.usgs.gov/minerals/pubs/usbmmyb.html
Pg. 88 Minerals Yearbook 1942 "Normally, 5 to 10 percent of world gold output is consumed by industry; the remaining 90 to 95 percent is used for monetary purposes."
http://minerals.usgs.gov/minerals/pubs/commodity/gold/
(Look under: Mineral Commodity Summary)
"Of the estimated 150,000 tons of all gold ever mined, about 15% is thought to have been lost, used in dissipative industrial uses, or otherwise was unrecoverable or unaccounted for."
Therefore, the average amount of gold consumed by industry or lost = 11.25% based upon the above sources.
Source 1 provides it's own percentage of attrition (i.e. lost gold), so this value of 11.24% will only be used to evaluate Sources 2 and 3.
Source 1 (multiple):
http://www.fgmr.com/gold.htm (including a pie chart)
"113,571 tonnes historical production less 10,854 total attrition =
107,717 tonnes." (Year-end 1996)
Below: Production numbers obtained from http://www.dailyfutures.com/metals/
| Year | World Mine Production |
|---|---|
| 2004 | 79.4 million ounces |
| 2003 | 83.3 million ounces |
| 2002 | 83.3 million ounces |
| 2001 | 84.3 million ounces |
| 2000 | 83.1 million ounces |
| 1999 | 81.7 million ounces |
| 1998 | 79.1 million ounces |
| 1997 | 77.5 million ounces |
| Total (1997-2004) | 651.7 million ounces |
107,717 tonnes x 32,150.75 ounces/tonne = 3.4632 billion ounces
3.4632 billion ounces + (651.7 million ounces x 90.846%%*) = 4.06 billion ounces
*100% - 9.154% attrition (calculated from the text within the above pie chart).
Cumulative Gold Production = 4.06 billion ounces
Source 2:
http://www.gold.org/value/reserve_asset/faqs/index.html#24
"The best estimates available suggest that the total volume of gold mined over history is approximately 153,000 tonnes, of which around 63% has been mined since 1950. The upward trend in annual production is now leveling off, due not least to a considerable slowdown in exploration spending in the late 1990s. Independent analysts are of the belief that mine output will remain flat for the next few years and may even drop slightly." (Year-end 2004)
153,000 tonnes x 32,150.75 ounces/ton x .8875* = 4.37 billion ounces
*100% - 11.25% attrition.
Cumulative Gold Production = 4.37 billion ounces
Source 3:
http://minerals.usgs.gov/minerals/pubs/commodity/gold/gold_mcs05.pdf
"Of the estimated 150,000 tons of all gold ever mined, about 15% is thought to have been lost, used in dissapative industrial uses, or otherwise was unrecoverable or unaccounted for. Of the remaining 128,000 tons, central banks hold an estimated 32,000 tons as official stocks, and about 96,000 tons is held privately in coin, bullion, or jewelry." (Year-end 2004)
150,000 x 32,150.75 ounces/ton x .8875 = 4.28 billion ounces
Cumulative Gold Production = 4.28 billion ounces
Source 4 (multiple):
From: http://www.gold.org/discover/knowledge/aboutgold/gold_prod/index.html
"World production at this time climbed to 280 tonnes in 1852 and thence to almost 300 tonnes as Australia. Production was lifted onto an even higher place in 1886 with the discovery of the huge gold reefs... in South Africa."
| Year(s) | Yearly Production | Total Production |
|---|---|---|
| 1848-1851 | Est. 260 tonnes | 1,040 tonnes |
| 1852-1886 | Est. 300 tonnes | 10,500 tonnes |
| 1887-1891 | Est. 400 tonnes | 2,000 tonnes |
| Total | 13,540 tonnes | |
| Total (in ounces) | 435.32 million ounces |
Minerals Yearbook 1932-1933
| Year(s) | Gold Production |
|---|---|
| 1891-1900 | 51.28 million ounces |
| 1901-1910 | 182.89 million ounces |
| 1911-1920 | 206.11 million ounces |
| 1921-1932 | 231.30 million ounces |
| Total | 671.58 million ounces |
USGS Data (1933-2002)
| Year(s) | Gold Production |
|---|---|
| 1933-2002 | 96,279 tonnes |
| Total (in ounces) | 3.0954 billion ounces |
GFMS Data (2003-2004)
| Year | Gold Production |
|---|---|
| 2003 | 83.33 million ounces |
| 2004 | 79.22 million ounces |
| Total | 162.55 million ounces |
| Above Totals | |
|---|---|
| Year(s) | Gold Production |
| 1848-1891 | .43532 billion ounces |
| 1891-1932 | .67158 billion ounces |
| 1933-2002 | 3.0954 billion ounces |
| 2003-2004 | .16255 billion ounces |
| Total (1848-2004) | 4.36485 billion ounces |
Since an estimated 90% of all the gold ever mined was mined after 1848 (Gold History):
4.36485 billion ounces/.90 = 4.8498 billion ounces x .8875 = 4.30 billion ounces
Cumulative Gold Production = 4.30 billion ounces
A Complete Summation of the Gold Data
| Source # | Cumulative World Production |
|---|---|
| 1 | 4.06 billion ounces |
| 2 | 4.37 billion ounces |
| 3 | 4.28 billion ounces |
| 4 | 4.30 billion ounces |
| Combined Average | 4.25 billion ounces |
Average Cumulative World Gold Production = 4.25 billion ounces
Ratios: What Nonsense they Reveal
We'll deal more extensively with the silver to gold ratio in Part 4 of this series, but just for fun let's find out what the ratio is in terms of the total amount of silver and gold ever mined in the history of the world:
44.55 billion ounces of silver/ 4.25 billion ounces of gold = a 10.5 to 1 ratio
Hmmm... This says nothing of the silver deficit and yet the ratio already reveals that at today's prices ($9/ounce vs. $540/ounce) silver trades at an 82.5% discount to gold, or conversely, it could be said that gold is overvalued by about 570% in terms of silver. Of the two ways of looking at the comparative price, I'll most certainly choose the former as I believe both silver and gold will be going up wildly in price in the coming years. Most would agree that neither gold nor silver is undervalued in terms of the dollar, so the only way to look at this situation is to say that silver is undervalued in terms of the dollar and gold. This means that I expect silver to far outperform any gains seen in the price of gold, even if gold doubles or triples in price within these next 2 years. The ratio will shrink, and silver will rise much faster, drawn up, as if by a vacuum in space, a vacuum created by the long-term market manipulation, short selling, and government dishoarding.
Don't believe me? Well then, you'll just have to wait until next time when we'll be stumbling into the "Silver Zone", and taking a much closer look at the much-lauded silver deficit.
Disclaimer
Information contained on the Silver In Scripture web site and published in both View My Portfolio and the Silver Stock Investment Newsletter is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. The information contained from these sources is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed therein are those of the publisher and are subject to change without notice. The information therein may become outdated and there is no obligation to update any such information. David Zurbuchen, entities in which he has an interest, employees, officers, family, and associates may from time to time have positions in the securities or commodities covered in these publications or web site. PLEASE SEEK THE ADVICE OF PROFESSIONALS, AS APPROPRIATE, REGARDING THE EVALUATION OF ANY SPECIFIC SECURITY, REPORT, OPINION, ADVICE, OR OTHER CONTENT. We do not in any way warrant or guarantee the success of any action you take in reliance on the statements of the designated subsidiary.