More than 877 million ounces of silver are mined annually. While the precious metal has long been seen as less valuable than gold, experts say that new industrial processes that use the material mean demand may increase in the near future.
One major opportunity for the silver industry is the production of solar power, reports the Telegraph.
Silver is used in solar photovoltaic (PV) cells. According to global business data experts IHS, demand for solar power is expected to increase by 30 per cent this year to 57 gigawatts of electricity. In China alone, 17 gigawatts of solar capacity should be installed by the end of 2015. IHS says this is creating a huge potential in demand for silver.
Most PV cells use silver paste in their construction – that industry is expected to account for 70 million ounces of supply through to the beginning of 2016. Last year, silver demand for the PV industry grew by around seven per cent and the rate of growth is expected to increase over the next ten years.
Increased demand, but a drop in value
Despite the increased demand and long-term need for the metal, silver prices have dropped during the past three years to around $17 (£11) per ounce. One reason for this drop in price has been China.
The latest World Silver Survey, published by the Silver Institute and Thomson Reuters explains that a slowdown in Chinese growth and a move away from the commodities as an asset class has led to silver's drop in value. In addition, they explain: "A stronger US dollar, and a challenging year for most precious metals in general, led to a lower average annual silver price".
Experts believe that long-term prospects could improve, especially if a binding agreement is reached during the United Nations Climate Change Conference in Paris.
A deal would mean the demand for PV would increase even more across major nations, including developing economies like India and China. In fact, there's concern that future supply could become an issue.
The Thomson Reuters survey says that silver mine production grew by five per cent last year and there was a decrease in coin and bar demand from 2013, which had been a record year.