U.S. government proposes adding Silver to list of critical minerals

The U.S. Department of the Interior has proposed adding silver to its list of critical minerals. The list, established in 2017, guides federal strategy, investment, and mine permitting decisions.

According to a Department of the Interior press release, “The List of Critical Minerals informs direct investments in mining and resource recovery from mine waste; stockpiles; tax incentives for U.S. mineral processing; and streamlined mining permitting.”

According to the Bipartisan Policy Center, inclusion on the list can make projects eligible for federal funding, subject to a streamlined permitting process, or more competitive due to fees placed on imports.

The draft notice includes 54 minerals, recommending the addition of potash, silicon, copper, silver, rhenium, and lead, along with the removal of arsenic and tellurium.

The Department of the Interior analyzes supply chain vulnerabilities as part of the list creation process. U.S. Geological Survey acting director Sarah Ryker said the new list reflects advances in forecasting potential mineral supply chain disruptions.

“Minerals-based industries contributed over $4 trillion to the U.S. economy in 2024, and with this methodology, we can pinpoint which industries may feel the greatest impacts of supply disruptions and understand where strategic domestic investments or international trade relationships may help mitigate risk to individual supply chains. This is a next-generation risk assessment that can be used to prioritize securing the nation’s mineral supply chains.”

Interior Secretary Doug Burgum reiterated the point, saying, “This draft list of critical minerals provides a clear, science-based roadmap to reduce our dependence on foreign adversaries, expand domestic production, and unleash American innovation.”

The draft notice has been posted for a 30-day public comment period, after which the draft will be approved or rejected. Once a draft reaches this stage, it generally receives approval.

Why Silver?

The inclusion of silver on the list of critical minerals underscores the growing importance of the metal and could signal worries about the lack of domestic supply.

Adding silver to the list could benefit domestic silver miners by streamlining permitting and easing some of the regulatory burden.

Silver conducts electricity better than any metal at room temperature. That makes it a vital input in the electronics and computing sectors. For instance, silver is an important component in solar panels. Demand for silver in the solar sector accounted for nearly half of the total silver demand in the electronics industry.

Silver is also crucial in defense applications. The world’s militaries use a substantial amount of the metal, although exact numbers are difficult to pinpoint due to the secretive nature of the military-industrial complex.

About 60 percent of global silver offtake is for industrial purposes. Industrial demand for silver set a record last year, and it continues to grow.

Meanwhile, the silver supply has become increasingly tight. Demand outstripped the silver supply for the fourth consecutive year in 2024. The structural market deficit came in at 148.9 million ounces. That drove the four-year market shortfall to 678 million ounces, the equivalent of 10 months of mining supply in 2024. 

Analysts forecast another supply deficit in 2025.

Sagging supply is likely one of the factors driving the decision to include silver on the list of critical minerals.

U.S. silver mine output was up by about 6 percent in 2024. The U.S. produced about 1,100 tonnes of metal. However, output has generally been flat over the last five years.

Globally, mine output has sagged since peaking in 2016.

Metals Focus forecasts that while we will see record silver prices over the next five years, “mine supply growth is likely to remain modest, with only minimal increases globally.”

Why won’t silver production ramp up to meet the demand and take advantage of these higher prices?

Metals Focus blames the price inelasticity on the fact that more than half of silver is mined as a byproduct of base metal operations.

“Although silver can be a significant revenue stream, the economics and production plans of these mines are primarily driven by the markets for copper, lead and zinc. Consequently, even significant increases in silver prices are unlikely to influence production plans that are dependent on other metals.” 

About 28 percent of the silver supply is derived from primary silver mines, where production is more tightly tied to price. But silver mines face their own challenges, including declining ore grades and rapidly rising mining costs.

Domestic silver miners could get a boost from the classification of silver as a critical mineral, but it won't necessarily alleviate the fundamental issue in the silver market -- rapidly increasing demand and structurally tight supply.

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