Silver output at First Majestic’s San Dimas mine in Durango, Mexico has stopped altogether after about 800 unionised workers made a September work stoppage a formal strike on October 8. The shutdown follows a 41% year-on-year fall in third quarter silver output at the operation, and it lands in a market already running short of metal, which is why silver investors are watching it closely.
What is behind the San Dimas strike
Workers stopped on September 18, and by October 13 there was no agreement and no return date. The union points to safety conditions, worn equipment, alleged breaches of the labour contract and a productivity bonus. First Majestic attributes part of the weaker quarter to 12 lost operating days and to lower ore grades. At last year’s run rate, each additional month offline removes roughly 0.5 million ounces of silver.
Why the ounces matter, and why they may not
The loss is small against the expected shortfall. The Silver Institute and Metals Focus forecast a 46.3 million ounce deficit in 2026, which we covered in our look at the 2026 silver deficit. Other supply is also soft, with Mexican mined silver down 4.3% in July and Peruvian output down 2.4% for January to July. There are offsets, though. Endeavour Silver’s output rose 19% as its Terronera mine ramped up, and Hindustan Zinc lifted refined silver by 20% in the quarter. Ore deferred by the strike could also be mined later, so the quarterly drop probably overstates any permanent loss.
What it means for ASX silver investors
For context, silver was trading around US$55 an ounce in mid October after a sharp one-day fall of about 6% on hotter US inflation data, which shows that interest rate expectations still drive the short-term price more than mine disruptions do. Still, a tighter physical market supports the investment case for developers and explorers, including ASX names such as Sun Silver. Investors should watch Mexico’s August mining data due around October 21, and third quarter results from the larger producers from late October. Benchmark pricing is published by the London Bullion Market Association.
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