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Silver and gold bars are displayed at a jewelry store in central Seoul. [YONHAP] [NEWS ANALYSIS] Silver’s rising strategic value is adding a new dimension to the critical minerals alliance between Korea and the United States as China implements export controls on the most conductive element vital to producing semiconductors. At the heart of the cooperation is Korea Zinc, the world's largest zinc smelter and one of the top silver producers, as it outputs around 2,000 tons of silver per year, nearly 6 percent of all silver produced globally. It helps explain the U.S. government’s highly unusual decision to acquire a roughly 10 percent stake in the company, a rare case of Washington taking an equity position in a private foreign firm. Silver prices climbed 148 percent in 2025 alone, powered by the surge in AI, solar energy and other next-generation industries, eclipsing returns from other major metals, according to recent data from the Bank of Korea. Over the same period, gold rose 64.6 percent, copper 41.7 percent, aluminum 17.4 percent and nickel 8.6 percent. Silver is trading near $94 per ounce on Wednesday after reaching an all-time high due to escalating U.S.-Europe tensions over Greenland. Despite having the moniker “the devil’s metal” due to the volatile nature of its price, experts argue that silver’s ascent is far from over, with demand expected to continue accelerating and strategic importance deepening. Korea Zinc's Onsan refinery [KOREA ZINC] Korea’s refiners step into the spotlight Silver’s dramatic ascent has propelled Korean companies like Korea Zinc into the global spotlight, positioning them as pivotal players outside of China. Korea Zinc announced a plan to invest $7.4 billion to build a smelting facility in Tennessee, with the metals produced at the site to be supplied primarily to the United States once the facility becomes operational. The factory will produce 13 products, including precious metals such as gold and silver, as well as key nonferrous metals such as zinc, lead and copper. To facilitate the deal, Korea Zinc will carry out a capital increase, through which the U.S. government, including the U.S. Department of War and the Department of Commerce, is expected to acquire roughly a 10 percent stake in the company. Korea Zinc is a major silver producer, with roughly 2,000 tons of capacity at its Onsan smelter in Ulsan, which makes it the world’s largest single-site silver smelting facility. As of last year, silver generated 2.38 trillion won ($1.6 billion) in revenue for Korea Zinc, representing 29.5 percent of its total standalone sales of 8.09 trillion won. Silver ranked second only to zinc, which accounted for 31.7 percent of revenue. “As the world’s largest smelter, producing about 5 to 6 percent of global silver supply, Korea Zinc is poised to post record earnings as metal prices rise,” said Park Kwang-rae, a research analyst at Shinhan Investment & Securities. “Silver is no longer merely a precious metal. It is emerging as a strategic asset at the center of decarbonization and electrification,” Park said. “Over time, it will shed the label of ‘the poor man’s gold’ and take on the role of a strategic monetary asset.” LS MnM is also gaining prominence as it produced roughly 400 tons of silver last year as a by-product of its copper smelting operations. As Korea’s largest copper refiner, LS MnM produces about 680 kilotons of electrolytic copper annually, extracting silver in the process. A customer looks at silver bars displayed at a jewelry store in central Seoul. [YONHAP] Riding the AI boom, propelled by solar power Though classified as a precious metal, more than half of the demand for silver originates in the power, electronics and energy sectors, where roughly 60 percent of global silver production is consumed for industrial purposes. With the highest electrical and thermal conductivity of any metal, silver has become indispensable in industries that require high-efficiency power, including solar panels, EVs and AI data centers. Each solar panel contains several dozen grams of silver, and installing enough panels to generate 1 gigawatt of electricity requires roughly 200 tons of silver. The International Renewable Energy Agency estimates that if global solar capacity triples by 2030, demand for silver will double from current levels. “Over the next three years, demand for silver is expected to rise structurally,” said Kim Young-ik, a professor at the Korea Banking Institute and a former vice president at Hana Securities. “As resource bloc formation intensifies, production costs for semiconductors, solar panels and electronic components are likely to increase." The automotive sector is another engine of rising demand — EV batteries alone require between 25 and 30 grams of silver per car. [JOONGANG ILBO] China tightens, supply thins Pure silver mines are largely depleted, and supply is proving woefully inadequate against a surge in demand. Ramping up production remains nearly impossible as developing a new silver mine typically takes more than a decade. Tighter environmental regulations, coupled with waning investment in mining, have further constrained new supply. Global silver output stands at roughly 25,000 to 27,000 tons a year, and the metal is produced mostly as a by-product of copper and zinc mining rather than from primary silver deposits. The Silver Institute estimated that the industrial demand for silver reached 21,160 tons in 2024, while the supply shortfall amounted to some 4,630 tons. Adding to the strain, the Chinese government announced that silver would be included in its “Export Licensing Control List,” effective Jan. 1, citing the need for “resource and environmental protection.” Under the new policy, only companies that can demonstrate silver exports every year from 2022 through 2024 will be eligible to export the metal. Authorities also finalized a list of 44 firms approved to export silver from 2026 to 2027. China is both a major producer and one of the world’s most formidable refining hubs for silver. Last year alone, China produced 5,910 tons of silver, ranking second globally after Mexico’s 6,843 tons. From January to November last year, China exported 4,600 tons while importing just 220 tons, accounting for roughly 23 percent of global silver trade. Crucially, the country controls an estimated 60 to 70 percent of the world’s silver refining capacity. “China’s export controls, combined with the U.S. designation of silver as a critical mineral, have significantly heightened supply chain risks,” said Seo Ji-yong, business professor at Sangmyung University. “Given Korea’s heavy reliance on imports, a sharp rise in prices could translate directly into higher industrial costs,” Seo said. “Strategic stockpiling, diversified sourcing and investment in recycling-related research and development are urgently needed.” BY SARAH CHEA [chea.sarah@joongang.co.kr]
