Both the Perth Mint and the Royal Mint have announced huge increases in year over year sales of precious metals.
According to the Royal Mint, gold sales increased 25% above 2021, silver demand was up by 29%.
Earlier this month, the Perth Mint reported that gold sales were up 10% for the year, noting that there was a drop in demand during December.
The Perth Mint is owned by the government of Western Australia and it is reported to be the largest refiner of newly mined gold in the world.
Meanwhile, the US Mint has been struggling to keep up with demand from domestic silver investors.
Sales of Silver Eagles slumped in 2022 as demand continues to soar. This led investors to buy silver coins from Australia and England.
Why is the US Mint struggling to keep up with the demand from investors?
The US Mint outsources the production of blank silver planchets to private mints.
The Mint cancelled the commemorative 2022 Morgan & Peace silver $1 coin series due to issues with acquisition of raw materials.
The planchet manufacturers need to adhere to all legal definitions. The main one being that coins be minted from domestically mined sources.
The pandemic exposed a lot of problems with America’s supply chain. Many in the mining industry continue to worsen with inflation and looming recession.
Many of the top silver and gold mining operations in the United States all reported encountering various production delays throughout the last year.
Many of the top miners have reported delays and higher fuel costs associated with the transport of slurry concentrates from remote mine locations to refiners for further upstream processing and smelting.
The US Mint began outsourcing the production of planchets that are used to produce coins.
While the current list of suppliers is not readily available, Sunshine Minting and LeachGarner are two of the private mints that have had previous contracts with the Mint.
Most of the world’s largest and most capable precious metals processing companies are located outside the US, making it more difficult for the Mint supply chain.
Some of the ore extracted from domestic mines is handled by multinational corporations.
Many of the world’s leading refineries such as PAMP Suisse, Metalor, and Valcambi are based in Switzerland.
The Perth Mint and Royal Canadian Mint operate the largest and most advanced refineries in the world.
Why is the US Mint continuing to outsource mining and smelting operations to foreign companies?
The five largest mines in the US:
Greens Creek Mine, Alaska
The Greens Creek Mine is owned by Hecla Mining Company. The mine is located on Admiralty Island in the Alexander Archipelagos Islands, roughly 40 miles south of Juneau.
In 2021, Greens Creek produced 9.2 million ounces of silver and 48,088 ounces of gold.
Projected production outlook for 2022 is expected to be slightly higher, between 9.3 and 9.6 million ounces of silver and from 44,000 to 48,000 ounces of gold.
However, issues with the quality of the base metals, primarily zinc and lead, Hecla had postponed shipments of silver concentrates to upstream refineries.
Red Dog Mine, Alaska
Located 105 miles north of the Arctic Circle near Kotzebue, Alaska. It is one of the largest zinc mines in the world and is operated by Teck Resources (TECK).
The Red Dog Mine is believed to be the largest deposit of zinc in the world. Roughly 4% of all of the zinc is produced from this mine.
Ore concentrates of the mine are trucked over 50 miles where they are stored in port.
Due to the extreme location, the silver slurry can only be transported by ship from the arctic during the months from June through October.
The mine has been operating since 1989. With current production levels, the mine is expected to continue operating only until 2031.
The Red Dog Mine is one of the largest domestic sources of critical minerals.
Zinc has a variety of industrial uses. It is also an essential part of the green economy, component manufacturing for electric vehicle, windmills and solar panels.
Silver, germanium and lead and other minerals are byproducts of the primary operations.
Over 7.7 million ounces of silver was dug out of Red Dog mine in 2017.
Continental Mine, Montana
The Continental Mine is located near Butte, Montana. Also where the World Museum of Mining is located.
The main commodities of the Continental Mine are copper and molybdenum. Molybdenum and copper are also critical metals and minerals needed in the domestic manufacturing of electrical devices, motors for EVs and other electrical components.
Silver and gold are extracted from the copper-molybdenite ore. Recent mine output data is not publicly available.
Marigold Mine, Nevada
The Marigold Mine is located in northern Nevada. The primary deposit is mineralized gold. The gold is extracted from sedimentary rocks including limestone, siltstone, breccias, meta-basalts and quartzite.
The mine is owned and operated by SSR Mining. The Marigold Mine began operation in 1989. The mine is expected to continue to sustain current production levels through 2032. Exploration and development of other nearby properties is expected to extend operations beyond.
Marigold is an open pit operations where blasted rocks is dumped onto heap leaching pages. A chemical process extracts precious metals and minerals from the ore and stored in carbon columns for later extraction through electrowinning.
Reports from SSR earlier in the year showed signs of delays in production with expectations of producing between 215,000 and 245,000 ounces of gold in 2022.
Rochester Mine, Nevada
The Rochester mine is an open pit, heap leach silver-gold operation in northwestern Nevada.
The silver-gold ore is extracted from sulfide deposits layered during Permian-Triassic period volcanic lava flows.
In 2021, the mining operations produced 3.2 million ounces of silver, while gold output was roughly 27,000 ounces.
Saudi Arabia experimenting with CBDC and alternative currencies to the PetroDollar
During the last year there has been a lot of media speculation regarding trade relations between Saudi Arabia and BRICS countries.
The Chinese central bank has been identified as buying roughly 300 tons of gold bullion in 2022. With Central Banks of other countries doing the same.
China has been wooing Saudi Arabia and making significant investments throughout the Middle East as part of the Belt & Road Initiative.
Saudi Arabia becoming part of BRICS and selling oil in a new basket currency would compete with both the Euro and the Dollar.
It seems pretty logical that China would intend for BRICS launch a CBDC digital currency that is backed by gold resources of the basket currency. Given that many central banks are experimenting with CBDC there will need to be interoperability between local currencies.