Silver: As a precious industrial metal : Daily Current Affairs

Relevance: GS-3: Indian Economy and issues relating to planning, mobilization of resources./GS-1: Distribution of key natural resources across the world

Key phrases: Silver, precious metal, solar power cell, Electric battery, sustainability, soft metal

Why in News?

  • Silver is an important precious metal of great antiquity, endowed with the characteristics of an industrial metal. In recent years, with increasing industrial applications, the importance of silver stands enhanced. The metal exhibits the highest electrical conductivity, thermal conductivity, and reflectivity of any metal.

What is Silver metal?

  • Silver is a chemical element with the symbol Ag and atomic number 47. A soft, white, lustrous transition metal.
  • The metal exhibits the highest electrical conductivity, thermal conductivity, and reflectivity of any metal.
  • The metal is found in the Earth's crust in the pure, free elemental form ("native silver"), as an alloy with gold and other metals, and in minerals such as argentite and chlorargyrite.
  • Most silver is produced as a by-product of copper, gold, lead, and zinc refining. Silver is mined as a mixture in ores along with other metals such as copper, gold, lead, zinc, sulphur, antimony, arsenic or chlorine.
  • Silver on account of its physical properties is now being increasingly used in industrial applications (55%) followed by jewellery (19%) and coins/metals (12%).

Silver production in world

  • According to the preliminary data released by the U.S. Geological Survey (USGS), global mine silver output was 25,000 tonnes in 2020, a 6% decline compared to 2019 (26,500 tonnes).
  • This drop in silver production was primarily associated with temporary shutdowns of mines in China, Mexico and Peru in response to the COVID-19 pandemic.
  • Mexico was the largest silver producer (5,600 tonnes), followed by Peru (3,400 tonnes) and China (3,200 tonnes). Nine out of the top ten silver producing countries have seen a decline in their silver output, while one country (USA) increased its domestic silver production by 2%.

Silver production in India

  • India is not a major producer of silver. Most of the silver consumption in India is driven by imports. It occurs generally with lead, zinc, copper and gold ores and is extracted as a by-product of electrolysis or chemical methods.
  • By states, largest resources in terms of silver ore are located in Rajasthan accounts (87%), Jharkhand (5%), Andhra Pradesh (4%), and Karnataka (2%).
  • In India, there are no native silver deposits except the small and unique deposits in Rajasthan. Zawar mines in Udaipur (Rajasthan) is the largest silver producing mine in the country.

Why Silver set to become a precious industrial metal?

  • Sustainability: Sustainability is the buzz word, after the United Nations unveiled the Sustainable Development Goals to be achieved by 2030. Recent policy developments have boosted the outlook for the white metal over the next ten years.
  • Green technologies are the in-thing; and silver has an essential role in green tech. Solar energy is seen as an inexhaustible clean energy to replace fossil fuels. This has led to the rapid advance of solar capacities around the world. In automobiles, Electric Vehicles (EVs) are seen replacing traditional internal-combustion engine vehicles. In both these, silver is used for its special and specific properties.
  • Applications in automotive sector: Silver will benefit from applications in the automotive sector - for example, in electrical contacts, micro-processors, memory and circuit boards, radar and camera sensors. Silver is difficult to replace in various automotive applications due to its superior electrical properties. Many are essential for safety and meeting tougher environmental standards.
  • Applications in EVs: Studies suggest that in battery-powered vehicles the use of silver will be markedly more than in conventional vehicles. This is in addition to use in charging stations, power generation and other supporting infrastructure that would need this metal.
  • The installation of solar systems too is driving demand for silver higher. The photovoltaic sector is currently demanding around 100 million ounces of silver annually. Some experts forecast an increase in silver demand to 185 million ounces over the next ten years from the photovoltaic industry.

Way forward:

  • Given this emerging scenario, silver is expected to benefit the most among precious metals. Silver may not only outperform gold but would at some stage decouple from gold and stand on its own.
  • The risk that silver supply growth may not keep pace with demand growth is real. So, stakeholders should brace for higher and higher prices in the coming years.
  • The Government of India should take cognizance of the emerging scenario. Demand within the country is likely to grow rapidly with policy thrust on EVs and solar energy. As import dependence for the metal is set to increase it is necessary to work towards augmenting silver supplies from a long-term perspective.

Source: The Hindu BL

Mains Question:

Q. India has scare resources of silver metal but to boost the EVs and solar energy India needs vast resources of silver. So in this regard what should India do to provide uninterrupted supply of silver for its economy? Critically examine.