Sand Usage Climbs in Construction Industry
Sand is a vital raw material for the construction and infrastructure industry, used to manufacture cement, asphalt, glass, metal castings and much more. Because of its vast industrial applications, sand is the second most consumed raw material around the world, surpassed only by water.
Per YaleEnvironment360, sand accounts for 85% of all mineral extractions from earth. Further, according to a report from the United Nations Environment Programme (UNEP), the global rate at which we use sand has tripled over the past two decades.
Per Statista data, the price of sand averaged $9.59 per tonne in 2020, up 31% from the price 10 years ago.
UNEP has estimated 4.1 billion tons of cement are poured globally each year, and population growth, coupled with rising industrialization trends, should push this number even higher. CNBC writes that the global use of sand and gravel is 10 times higher than that of cement, which means that for construction alone, the world uses roughly 40 billion tons of sand per year.
There are several different types of industrial sand. Aggregate, for instance, includes gravel, crushed stone and a number of recycled materials, such as crushed concrete. There are also more expensive specialties like frac sand, which is used in the process of extracting oil through hydraulic fracturing. Typically, frac sand goes for about $25 per tonne, but in times of short supply, Investopedia notes prices have climbed as high as $70 per tonne.
Outside of its industrial use in construction and fracking, sand is an important part of the renewable energy transition as well. Polysilicon, a key material used in solar panel construction, is an ultra-refined form of silicon found in sandstone rock. The solar industry’s appetite for sand will continue to climb for both polysilicon and glass paneling as, per Bloomberg, the solar panel market is projected to quadruple by 2030.
Sand Deficit Projected to Widen
Though it will be a critical component of the coming renewable energy transition, sand itself is largely non-renewable. According to the BBC, sand can take thousands of years to form before it may be properly mined and utilized in infrastructure projects. The process involves erosion from mountains and rocks being deposited into riverbeds and beaches, where it is primarily mined.
As Michigan State research associate Dr. Aurora Torres, lead author of a new study on sand usage, recently noted: the world uses “around [45.3 billion tonnes] of sand, gravel, and crushed rock to produce concrete for our houses and to build roads and infrastructure… Sand and gravel are the world’s most extracted solid materials by mass and their annual consumption is predicted to double by 2060”.
It takes a certain kind of sand to be commodity-grade. This means the seemingly infinite amount of desert sand we have, for instance, cannot be used as a substitute, as it is too smooth and rounded to bind together for construction purposes. The sand that is highly sought after for industrial uses is more angular and can lock together, sourced from the aforementioned oceans and riverbeds.
Cnet notes researchers have studied a variety of replacements for sand as an ingredient in concrete. Shredded plastic, shredded rubber and even hemp are being utilized on a limited scale, but we’ve yet to see these deployed in any meaningful way.
A coming global boom in construction and infrastructure has exacerbated concerns regarding the sand shortage.
The Independent reports that, since 2003, China has poured more concrete every three years than the United States did throughout the entire 20th century. China currently accounts for 58% of global sand and gravel consumption, according to UNEP data.
Population growth, which naturally breeds demand for more construction, is another factor driving the shortfall predictions. The Asia Times reports that India is expected to overtake China as the most populous country in 2027. According to Forbes, the global population will grow by two billion people by 2050, and the construction industry will have to rapidly advance their planned output to meet that surge. A Michigan State University Report found that eight cities the size of New York will be built every year for the next three decades, illustrating the fact infrastructure won’t be slowing down anytime soon.
A Loosely Regulated Industry Creates Concerns
Currently, the mining process for sand and gravel is very unsustainable.. CBC recently reported that there is now more man-made mass than natural biomass on earth, most of which is constructed from sand.
The CBC also added that the overwhelming demand for sand has caused some islands and beaches to completely disappear, and riverbeds to collapse. A report from Michigan State University concluded the upcoming sand shortage could be delayed if the industry implements more sustainable practices while beginning to limit the amount of natural sand currently used for construction and infrastructure.
As the Financial Times recently wrote, the post-pandemic infrastructure boom has led to an increase in illegal mining because the process can be so lucrative. Groups of illegal miners called “sand mafias” have been popping up in countries like India and Morocco, mining the resource to sell to construction companies for their own profit.
Nonetheless, governments across the world are expected to boost infrastructure spending to jumpstart their economies, which will likely lead to a continued surge in demand for sand and gravel. A loosely regulated mining industry and environmental impacts from unsustainable mining practices could continue to deplete sand reserves faster than they can be replenished, pushing the material deficit higher and driving up costs for construction and energy firms.
Publicly traded producers of sand include building materials producers CRH PLC (CRH) and Martin Marietta Materials, Inc. (MLM).
U.S. Silica Holdings, Inc. (SLCA) specializes in the production of frac sand.