Peru's Mining Unrest Puts Pressure on Silver Supply

Silver's price has been volatile in recent weeks, influenced by macroeconomic events such as renewed strikes on Iran. However, a more significant and lasting threat to silver supply lies in Peru, where the country's president-elect, Keiko Fujimori, may face protests from mining communities over stalled projects.

Peru is one of the top silver-producing countries, accounting for about 15% of global output, or close to one ounce in six. Most of its silver production comes as a byproduct of lead, zinc, and copper mining, which makes it vulnerable to disruptions in these other metals' markets.

The country's mining industry is already facing challenges, including an energy shortage that led to an emergency decree in May. The formalization program for the informal-mining sector has also been extended until 2026. A wave of protests over stalled projects could further tighten Peru's supply picture and have a ripple effect on global silver markets.

The world's mined silver supply is already expected to be flat in 2026, with a decline of about 2.5 million ounces forecast by Metals Focus and the Silver Institute. This means that any regional threat to silver supply, such as Peru's potential unrest, becomes more significant because there is no spare capacity to make up for the difference.