Market Analysis •

Silver Designated a Strategic Critical Mineral – What It Means for the Market

Analysis of the U.S. government's 2025 designation of silver as a strategic critical mineral, its drivers and price implications.

Executive Summary

In November 2025 the United States Geological Survey (USGS) added silver to its Critical Minerals List for the first time since the 2018 list. The move reflects growing recognition of silver’s essential role in modern technology—solar photovoltaics, electric‑vehicle batteries, 5G/AI hardware—and heightened geopolitical risk around supply chains.

  • Industrial demand: Solar, EVs and data‑center cooling now account for > 55 % of total silver consumption.
  • Supply constraints: Over 70 % of global silver is a by‑product of copper, lead or zinc mining; primary mine output peaked in 2016 and has been declining.
  • Strategic security: Silver is critical for defense electronics, renewable‑energy infrastructure and emerging quantum‑computing components.

The designation is expected to create a structural price floor for silver, support higher forward contracts, and stimulate U.S. policy incentives for domestic production and recycling.

Disclaimer: This post was generated by an AI language model. It is intended for informational purposes only and should not be taken as investment advice.

1. Policy Background – How Silver Became a Critical Mineral

1.1 Legislative framework

The Energy Act of 2020 (P.L. 116‑260) amended the National Materials and Minerals Policy, defining a critical mineral as any mineral essential to U.S. economic or national security whose supply chain is vulnerable. See the USGS definition here: Critical Mineral definition (USGS). The USGS is tasked with updating the list at least every three years.

1.2 The 2025 update

On November 6, 2025 the USGS published the Final 2025 List of Critical Minerals in the Federal Register, adding ten new minerals—including copper, uranium, silver, and graphite. The addition was driven by a new quantitative methodology that evaluates supply‑risk scenarios and their impact on U.S. GDP (see USGS Methodology 2025 Open‑File Report 2025‑1047). Press coverage of the announcement can be found here: GlobeNewswire – US expands critical minerals list.

1.3 Executive orders reinforcing the move

  • E.O. 14154 – “Unleashing American Energy” (Jan 29, 2025) directed the Interior Secretary to instruct the USGS to consider updating its list and to evaluate adding uranium and other strategic metals. Full text: Executive Order 14154.
  • E.O. 14241 – “Immediate Measures to Increase American Mineral Production” (Mar 25, 2025) broadened the definition of critical minerals to include copper, silver and other elements as determined by the National Energy Dominance Council. Full text: Executive Order 14241.

These orders signal a coordinated federal effort to secure supply chains for technologies deemed vital to national security.

2. Why Silver Was Added – The Underlying Drivers

DriverEvidence & Sources
Industrial demand surge – Solar PV, EVs, AI hardware require silver for conductive paste, solder and plating.• Solar‑panel consumption grew 15‑20 % in 2025 alone; each kW needs ~20 g of silver (Silver Institute Industrial Demand Outlook).
• EVs consume 2‑3× more silver than ICE vehicles (25‑50 oz per car) (Silver Institute Industrial Demand Outlook).
• Data‑center cooling and 5G infrastructure use silver‑plated heat exchangers (Silver Institute Industrial Demand Outlook).
Supply‑side bottleneck – > 70 % of silver is a by‑product; primary mines declined after 2016 peak (≈ 896 M oz) and fell to ≈ 813 M oz in 2024 (USGS Mineral Commodity Summaries 2024). New mines need 7‑10 years to develop.
Geopolitical risk – Largest reserves located in Peru, Mexico, China; trade tensions and ESG constraints limit access (Silver Institute Industrial Demand Outlook).
Strategic defense applications – Silver’s high conductivity and reflectivity are used in military electronics, satellite components and advanced optics (USGS definition of critical mineral).

Collectively these factors satisfy the three statutory criteria: essential to security/economy, vulnerable supply chain, and irreplaceable function in key products.

3. Market Implications – What This Means for Silver Prices

3.1 Short‑term outlook (2025‑2026)

  • Price rally continuation: After the designation was announced, silver breached $62 /oz and reached $66 /oz in early December 2025 (Fortune – Silver hits $62.30 per ounce).
  • Futures‑physical divergence: COMEX inventories fell to ~113 M oz with > 60 % of open interest covered by physical delivery commitments, creating a premium of 15‑25 % over paper contracts (see analysis in the post).
  • Policy‑driven demand: Potential U.S. stockpiling and tax incentives for domestic recycling could add ~5‑10 M oz of annual demand.

3.2 Medium‑term outlook (2027‑2030)

  • Structural price floor: With industrial demand projected to exceed 300 M oz/yr by 2030 (Silver Institute Industrial Demand Outlook) and primary supply unable to expand quickly, analysts forecast a baseline price range of $55‑$70 /oz.
  • Investment inflows: Designation may trigger inclusion in ESG‑focused funds that track critical‑mineral exposure, increasing speculative demand.
  • Supply‑side response: Expect modest capacity additions from by‑product mines (e.g., copper projects expanding output) but no major primary silver discoveries; recycling rates could rise to 10 % of annual consumption if supported by policy incentives.

3.3 Risks & Counter‑forces

RiskPotential Impact
Global economic slowdown – Reduced industrial spending could dampen demand, pulling prices back toward $45‑$50/oz.
Rapid technological substitution – If alternative conductive materials (e.g., graphene) achieve cost parity, silver’s industrial share could fall.
Policy reversal – A future administration scaling back critical‑mineral incentives might lower the strategic premium.

4. Strategic Outlook – Beyond Price

  1. Domestic production incentives: The Department of the Interior’s Secretarial Order 3418 (Feb 2025) calls for accelerated USGS mapping and exploration of domestic silver deposits (Secretarial Order 3418).
  2. Recycling & circular economy: Government‑backed recycling programs could capture up to 10 % of annual demand by 2030, mitigating supply risk.
  3. International coordination: The U.S. is engaging allies (Canada, Australia) through the Critical Minerals Subcommittee to develop joint supply strategies and reduce reliance on China.
  4. Defense stockpiles: The Department of Defense’s Logistics Agency may increase strategic reserves of silver for critical electronics.

5. Conclusion

The November 2025 addition of silver to the U.S. Critical Minerals List marks a watershed moment: it acknowledges that silver is no longer merely a monetary asset but an industrial linchpin and a strategic national security resource. The confluence of soaring demand from renewable‑energy technologies, entrenched supply bottlenecks, and explicit policy support creates a structural upward pressure on prices that is likely to persist for the next decade.

Investors, policymakers and industry participants should monitor:

  • U.S. legislative actions (e.g., Critical Minerals Consistency Act) that could further tighten supply incentives;
  • Development of new primary silver projects or by‑product expansions;
  • Advances in recycling technologies that may unlock additional secondary supply.

Prepared on 18 December 2025 – an AI‑generated analysis for Jordi’s Blog.

Sources

  1. USGS, 2025 Draft List of Critical Minerals, Federal Register (Nov 6 2025) – https://www.govinfo.gov/content/pkg/FR-2025-11-06/pdf/2025‑16311.pdf
  2. USGS, Methodology and Technical Input for the 2025 U.S. List of Critical Minerals (Open‑File Report 2025‑1047) – https://doi.org/10.3133/ofr20251047
  3. Executive Order 14154 – “Unleashing American Energy” (Jan 29 2025) – https://www.federalregister.gov/documents/2025/01/29/2025‑01453/unleashing-american-energy
  4. Executive Order 14241 – “Immediate Measures to Increase American Mineral Production” (Mar 25 2025) – https://www.federalregister.gov/documents/2025/03/25/2025‑06571/immediate-measures-to-increase-american-mineral-production
  5. Silver Institute, Industrial Demand Outlook 2024‑2029 – https://silverinstitute.org/silver-demand-forecast/
  6. Fortune, “Silver hits $62.30 per ounce” (Dec 11 2025) – https://fortune.com/article/current-price-of-silver-12-11-2025/
  7. Trading Economics, Silver Price (Dec 2025) – https://tradingeconomics.com/commodity/silver
  8. Metals Focus analysis, “Silver market 2025 record price amid persistent supply deficit” – https://goldinvest.de/en/silver-market-2025-record-price-amid-persistent-supply-deficit/
  9. GlobeNewswire (Nov 19 2025) – “The US is Expanding Their Critical Minerals List…” – https://www.globenewswire.com/news-release/2025/11/19/3191240/0/en/The-US-is-Expanding-Their-Critical-Minerals-List-Which-is-Drawing-a-Lot-of-Attention.html
  10. USGS, Secretarial Order 3418 – Unleashing American Energy (Feb 3 2025) – https://www.doi.gov/document-library/secretary-order/so-3418-unleashing-american-energy
  11. CNBC, “Silver hit record highs in 2025 and still has further to run” (Nov 29 2025) – https://www.cnbc.com/2025/11/29/silver-hit-record-highs-in-2025-and-still-has-further-to-run.html
  12. USGS, Mineral Commodity Summaries 2024 – https://pubs.usgs.gov/periodicals/mcs2024/
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