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2012 also saw an investment in expertise — in people who have the specific skills and know-how necessary to improve our operations. People like Ed Sutich, the Lucky Friday general manager, who brings a wealth of underground experience from both the U.S. and abroad; Mark Board, with over 30 years of worldwide experience, who is overseeing our U.S. geotechnical engineering — a key expertise for underground mines; and Mike Wegleitner, who has joined us as the director of health and safety, will enable Hecla to improve safety for our employees and to become a recognized safety leader in the mining industry. 

## MeetIng the neeDS oF a ChangIng worlD 

The theme for this year’s annual report isn’t just a slogan. It’s something we believe. Why? Because silver is a growth industry — and it’s in the midst of a long-term bull market with a very bright future. 

Throughout history, silver has been a monetary element, and we think that role will only increase, resulting as it has this past decade in higher prices. But the real growth is in the role silver plays in people’s everyday lives. In everything from smartphones to tablet computers, from solar panels to healthcare, silver is elemental. 

Think about what’s happening in China and in India. Between the two countries there are 2.5 billion people — more than a third of the world’s population. Seventy percent of India’s and 50 percent of China’s populations are rapidly urbanizing. And as they move from rural areas to cities, their standard of living increases dramatically. They begin to expect the amenities that, in the U.S. and elsewhere in the developed world, are taken for granted. 

Growth in these two countries is explosive — and the rate of urbanization is massive. Demand is following that growth. In India alone, industrial demand for silver has grown at an annual rate of 8 percent over the past 20 years, the bulk of it coming from domestic needs as opposed to China’s export-driven economy. At that rate, it’s expected that India’s industrial silver demand will more than double — from 61 million ounces in 2011 to 150 million — by 2020. 

<img src='content_image/152487.jpg'>

## Silver Consumption per Capita 1990 vs. 2010 GDP Per Capita (2000 US$) 

<img src='content_image/152488.jpg'>

Silver consumption per capita is closely tied to increases in GDP (Gross Domestic Product) per capita. In developed economies like the United States, Japan, and Germany, silver consumption per capita has seen a steady increase from 1990 to 2010 (where in the U.S., it doubled from 0.2 ounces to 0.4 – an annualized growth rate of 3.7%). In contrast, South Korea, which has made the transition from a developing economy in 1990 to fully developed in 2010, has seen its silver consumption per capita increase tenfold. As urbanization continues to drive consumer demand for durable goods, electronics, automobiles, and construction – all of which require silver – the consumption of silver in emerging economic giants China and India will inevitably rise. 

