Credit: Rob Lavinsky, iRocks.com – CC-BY-SA-3.0

Peru, the second-largest silver producing country globally, is experiencing a downfall in the silver market. Eclipse to the profits of mining companies in Peru is the indicator of decreasing financial benefits of companies.

Compania de Minas Buenaventura SAA, one of the leading silver mining companies in Peru, declared reduced profits compared with those in the earlier year. The company said its net income in the first quarter of last year was $224.8 million, while this year’s first quarter has not shown the net income beyond $207.5 million.  It also revealed that the company’s shares have come down to 82 cents from 88 cents per share last year.

According to the company, the profit and the silver market, in general, is hampered by higher operating costs, increased labour charges and other expenses in the quarter.

The experts of the silver investment market affirm the situation. Even though the prices of silver by-products viz. ornaments have increased, sales are comparatively low.

They also added that net silver supply from above-the-ground stocks has noticeably fallen by 14 % in 2011, making it to just 278.9 Moz. Considerably low net producer hedging and decline in government sales resulted in the decline, the experts say.