A large share of precious metal supply is not produced by mines that set out to produce it. It emerges alongside copper, lead, zinc and nickel, and that changes how supply behaves.
Ore bodies contain more than one metal
Metals occur together in nature according to how the deposit formed, so a copper deposit frequently carries gold and silver in the same rock.
Processing the ore for the main metal brings the others through the circuit as well, and recovering them requires additional steps rather than additional mining.
The marginal cost of that recovery is small compared with the cost of extracting the ore in the first place, which was incurred for the primary metal.
Credits are subtracted from cost
Accounting convention treats revenue from secondary metals as a reduction in the cost of producing the primary one rather than as a separate income line.
A copper mine with significant gold output can therefore report a cost per pound of copper that looks unusually low, or occasionally negative.
This is a presentational choice rather than a statement about efficiency, and comparing such figures across mines with different metal mixes requires care.
Byproduct supply ignores its own price
Because production decisions are driven by the primary metal, a fall in the secondary metal's price does not usually reduce its output.
The mine keeps running as long as the primary metal justifies it, and the secondary metal continues to appear as an unavoidable consequence.
Supply of that metal is therefore inelastic in the short term, which allows imbalances between supply and demand to persist longer than they would otherwise.
Silver and the platinum group show it clearly
A substantial majority of newly mined silver comes from mines whose primary output is copper, lead or zinc rather than silver itself.
Palladium is similarly produced largely alongside nickel and platinum, so its availability depends on decisions made about entirely different markets.
This is a major reason both metals can sustain large price moves without a matching supply response from mining.
Recycling responds where mining does not
Because primary supply is unresponsive, the adjustment tends to come from scrap, which flows more readily when prices rise.
Recovery from spent industrial catalysts, electronics and jewellery expands as higher prices make collection and processing worthwhile.
Recycled supply therefore acts as the flexible part of the market, and its behaviour explains price patterns that mine output alone cannot.