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The World's Thirst for Sand is Having Serious Economic and Environmental Consequences

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 24, 2020 2:16 PM 2 min read

Sand is king. It is vital everywhere, from agriculture, artificial island-building and smartphone manufacturing to fracking, the textile industry and virtually all kinds of construction.


But sand is also a non-renewable resource. Humanity, especially since reinforced concrete was invented in the early 1900s, has been mining sand at an exponential – and unsustainable – rate and this is having serious economic and environmental consequences.


How Exponential?: To put the acceleration into perspective – China got through more cement between 2011 and 2013 than America did in the entire 20th century. And the OECD thinks the construction industry’s demand for sand and gravel will double over the next 40 years.


Money Bags: Little wonder then that the price of sand is rocketing. The price has more than quintupled (5x) since 1978. In some countries, the jump has been cosmic in brief periods of time. In Vietnam, for example, the price of sand quadrupled (4x) in only 2017.


Sins of Asia: Rapidly urbanising Asia is scooping up sand the fastest – and at a rate faster than it can naturally replenish itself. This comes at a severe cost. Riverbeds are losing fertility, salty sea water is pushing into deltas and rivers, and coastal areas are becoming more prone to flooding. Not to mention, sand itself is depleting. In Indonesia, some two dozen small islands have vanished since 2005. Vietnam expects to run out of sand this year.


The Sands of Crime: Controlling sand mining is a big challenge because much of it is done illegally. Only about two-fifths of the sand extracted worldwide every year is traded legally. This unregulated industry is vast and lucrative, with its own bosses, fixtures and rules.


Hoping for Hope: Scientists are experimenting with alternatives to concrete and cement. Research is being done on how construction material can be used more sparingly. And, once in a while, some government or the other wakes up and initiates action.


But is this enough? Let’s hope we pull our heads from the sand before it disappears altogether.