American Silver in Silver Eagles

Many people believe that they have heard that the U.S. Mint is required by law to purchase silver mined in the United States to create the American Silver Eagles.

This is only partially true.

The Original Law

When American Silver Eagles were first introduced in 1986, the law stated that the silver for American Eagles come from the U.S. Strategic and Critical Materials Stock Pile (curious? read about the stockpile here).

At that time, the Mint could only buy silver for Eagles from the government stockpile. For other silver coins (but not Eagles), it could purchase newly mined silver from American refiners.

The 2002 Change

However, in the early 2000s, the stockpile was quickly depleting. If it was allowed to be used up, no more silver American Eagles could be minted. So the law changed in 2002, such that once the stockpile was depleted, the Mint was required to buy silver from natural deposits in the United States that were brought to the U.S. Mint within a year after being mined (as had been allowed for other silver coins).

However, the law also provided an out: "If it is not economically feasible to obtain [silver from U.S. mines]", the Mint could obtain the silver "from other available sources." That gave the Mint the ability to buy foreign silver in cases where American silver was not available (or could only be obtained above spot price, as it states that the Mint cannot pay more than the "average world price", essentially the COMEX spot price).

Newly Mined Silver

The requirement to use American silver only applied to newly mined silver (within 1 year of being mined), to help support American silver mines.

So the law treated "old" silver mined in the United States the same as foreign silver.

At any point where obtaining the recently mined U.S. silver was not economically feasible (e.g. if it would cost more than spot, or not available as quickly as needed), the Mint could use any other silver they could find.

Source

You can find the law, as well as the notes about changes, at law.cornell.edu.

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