- Shares in Silvercorp Metals (SVM) are falling, despite the China-focussed precious metals miner receiving a “green” certification from the government
- Certified through China’s Ministry of Natural Resources, the “green mine” designation is associated with more favourable treatment from different levels of government
- The company’s TLP, LME, LMW and HPG mines in Henan Province’s Ying Mining District all received the certification, as did the GC mine in Guangdong Province
- Despite the news, Silvercorp is gripped in its worst trading day in months, as falling silver prices, rising cases of COVID-19 across China and increasing geopolitical tensions contribute to a poor macro-environment
- Silvercorp Metals is currently down 12.89 per cent and is trading at C$7.57 per share
Shares in Silvercorp Metals (SVM) are falling, despite the China-focussed precious metals miner receiving a “green” certification from the government.
Certified through Ministry of Natural Resources of China and the relevant provincial bodies, the “green mine” designation is associated with more favourable treatment from different levels of government.
Specifically, by demonstrating a mine minimizes adverse impacts on the environment and ensures sustainability, an operator is more likely to secure priority rights to mining resources, improved land security, as well as finance and tax support.
Following a six-day onsite inspection, the company’s TLP, LME, LMW and HPG mines in Henan Province’s Ying Mining District all received the certification. Over in China’s Guangdong Province, Silvercorp’s GC mine also independently received the designation.
Criteria for the listing include environmental impact assessments, a lack of production accidents, deaths, environmental accidents, as well as focus on energy efficiency.
The sites are also required to “adopt scientific design and measures to ensure sustainable development from mine development to closure”.
Regional legislation’s emphasis on clean, green, sustainable mining practices is only likely to increase, as China continues to head towards carbon neutrality by 2060.
Investors have responded poorly to the news, with Silvercorp Metals shares opening more than 12 per cent down this morning. The plunge has wiped off more than four months of gains, taking the company back to its July share price, to now be just four per cent up on its price at the start of 2020.
Falling silver prices have likely contributed to the sell off, as bullish investors high on vaccine hopes retrieve money from precious metal safe havens for use in more volatile markets.
Rising cases of COVID-19 across China and increasing tensions between Beijing and major western nations are also liable to be dragging Silvercorp’s shares down further.
Silvercorp Metals is currently down 12.89 per cent and is trading at C$7.57 per share at 11:01am EST.
