Sand

The BBC has an article by Renuka Rayasam about sand:

Sand. We take it for granted. From deserts to beaches to children’s playgrounds, it seems ubiquitous. Yet the abundant resource is feeding a global land grab that’s even bred a sand-smuggling underworld.
While researching beach erosion in Negril, Jamaica about six years ago, scientist Pascal Peduzzi’s conversation with residents in a fishing village left him astounded. Despite the high-tech geospatial modeling and remote-sensing tools he was using to survey the damage, he’d never have surmised one reason for erosion on the country’s western coastline. Locals told him about the local mafias; armed men who came to the beach in the middle of night, hauled away bags of sand, and sold them for the construction of beachfront developments.
“I was shocked that people would fight for sand,” said Peduzzi, director of science at the United Nations Environment Program’s Division of Early Warning and Assessment. “I have been working for more than twenty years in the environment sector, but sand came as a surprise.”
Demand for sand has led to the emergence of illegal mining of the material. As building material, sand has withstood the test of time. In 3500 BC, the ancient Egyptians and Mesopotamians were using sand, mostly formed when wind and water ground rocks into silica-rich grains, to make glass. Today, builders the world over use sand, found in quarries, rivers, lakes, and oceans, for many of their materials, including paint and cement. It’s used in everything from swimming-pool filters, metal castings, and oil wells to smartphone screens and toothpaste.
With a global building boom and the arrival of hydraulic fracturing (fracking) technology for oil and gas in the United States, the demand for sand has been skyrocketing. In 2014, two hundred million tons of sand, and its bigger counterpart, gravel, were mined around the world, according to the US Geological Survey. After water, it’s the most abundantly used natural resource, Peduzzi said.
The overall sand and gravel market was valued at over eight billion dollars in the US last year , according to the USGS. Global demand for sand is expected to rise over five percent a year through 2018, according to a December of 2014 report from the Freedonia Group. Investors willing to weather the volatility, sift through the fragmented market, and take on potential environmental risks, could stand to profit from the growing appetite for this global commodity.
For years the sand market had been pretty boring, said Sonny Randhawa, a vice president in charge of research for the energy sector at D.A. Davidson, an Oregon-based investment firm. But in the past few years the sand market has been more “feast or famine”, he said, particularly in the US.
Building booms in China and India have increased the need for sand in those markets. Globally, China accounts for a fifth of the world’s sand imports, according to the Trade Statistics Branch of the United Nations.
Because of the frenzied development of new dams, roads, buildings and factories, China has used more sand in the last four years than the US has in the last century, according to Peduzzi. China has even been piling huge amounts of sand onto reefs to create new islands and expand its foothold in the South China Sea.
Even the United Arab Emirates imported a half billion dollars worth of sand, stone, and gravel in 2014, according to the UN. Despite being in the heart of the desert, imported sand built Dubai, according to Pascal, as wind-formed desert sand is too smooth for construction.
Meanwhile, in the UK, the need for sand has dropped off as new construction cools and recyclables get a political push. Demand for rock, gravel, and sand is twenty-five percent below 2007 levels, according to the UK Mineral Products Association.
In the US, the rise of hydraulic fracturing or “fracking” has created a huge appetite for sand. In 2013, the production of sand for fracking wells was nineteen times higher than a decade earlier, according to the USGS. The process involves injecting water, sand and chemicals down a horizontally drilled well thousands of feet below the earth’s surface into a rock formation to extract oil or natural gas.
While the market for industrial sand has tracked overall economic growth in the US, the demand for fracking sand has been as volatile as oil prices. From 2011 to 2014, the demand for fracking sand more than doubled, then dropped off last year to fifty million tons, said Randhawa.
But, even as oil prices tail off, demand for sand is growing, largely due to the increased amount of sand going into wells in an attempt to extract more oil, according to Marc Bianchi, a managing director at Cowen and Company. As fracturing technology becomes better at extracting more oil per well, the amount of sand used per well has also doubled, from two thousand tons a well in the second quarter of 2013 to over four thousand tons in the fourth quarter of 2015, he said.
It takes deep pockets and pioneering spirit to buy up a sand mine or offshore facility directly. Many countries regulate sand extraction, handing out a limited number of licenses to prevent over-mining. And the technology to extract, process, and transport sand will likely be far too expensive for individual investors.
Even investing in existing sand companies requires untangling complex layers across the value chain, from smaller mom-and-pop operations that may own a single mine, to large multinational players like Belgium-based Sibelco Group, a company that operates in forty countries, or Germany’s Heidelberg Cement, which makes and sells cement in forty countries and owns and operates sand facilities globally.
For the most part, the highly fragmented market is regionally focused. On the European side, the European Association of Industrial Silica Producers maintains a comprehensive list of major players on the continent.
In the US, more than two hundred companies have over three hundred sand operations across three dozen states, according to the USGS. Within the past few years, four US sand companies have started selling shares on the New York Stock Exchange and Randhawa has “buy” ratings on all them. Two of the companies, Emerge Energy Services and Hi Crush Partners, focus exclusively on the fracking sand market, while Fairmount Minerals and US Silica also have industrial sand operations. Because of their recent listings, Randhawa said that it’s tough to track returns but, with unpredictable oil prices, investors willing to take the risk should be prepared for volatility.
Both Randhawa and Bianchi believe that US Silica, which has been around since 1900, is best prepared to survive the roller coaster. They said the company’s long-standing customers provide the company a stable source of revenue even if demand for fracking sand levels off, plus the company has been churning out new sand-related products such as adding antimicrobial coating to swimming pool-filter sand.
Finally, there are legal and environmental concerns to think about around the world. Beaches have eroded an average of forty meters from 1968 to 2008, according to Peduzzi. In some areas, such as South Carolina and California, erosion from over-mining and global warming has measured hundreds of meters. In other parts of the world, islands have disappeared altogether.
“We do still have a huge amount of sand,” said Peduzzi. But “because we use it so much, sand is becoming rare. That’s not to say we should stop using sand, but we should be a bit more cautious.”

Rico says those with coastal property might have to start guarding it, or get fracked, like those guys in Negril...