I watched the documentary Sand Wars on al Jazeera recently, it was interesting but ultimately came up short, and that's because the documentary lacked balance and became emotive.
I know something about sand. Some may call me an expert on the subject but I wouldn't go that far, I'd call myself a specialist. That said there are several things to consider about sand and where to find it, how to process it. Sand is critical for construction, the oceans, and our coastlines. We can't have a civilisation without sand and our environment is jeopardised if we extract too much ot it. So what is the answer? That's what I'm going to deal with here:
1. Natural or Man-made?
The above documentary never once considered quarried rock being transformed into sand. They did have someone at an aggregate trade show or conference saying that all the natural deposits of sand and gravel had been taken away. That is nonsense.
There is a rule in the sand business; first find a natural deposit. This can be quite difficult as a lot of factors need to be considered when searching for a suitable extraction pit. Such things as distance to market or end-user, ease with which the resource can be extracted, the physical properties of that resource having a bearing on just how much processing is involved, water sources and so on. But increasingly regulation and the NIMBY effect come into it as well. There is a lot of natural, clean sand out there, you're just not allowed to touch it because of that last factor.
So what now then? You have to manufacture that sand at your already operationally consented rock quarry. This is not an easy exercise and involves complex machinery which can be very expensive. Even when set up the end-product can be of much lesser quality than the natural equivalent. It doesn't have to be, but man is fallible and they don't always get it right.
Is sand running out? The short answer is No.
2. Sand from the Sea or Beach.
This is generally not the answer as salt comes with the sand. Sand dredged from below the sea is not as heavy with salt as beach sand is, but this source of sand still requires further processing, or thorough washing before it can be used in construction. The documentary said that buildings in Tangiers may fall down because they're built with sand from the sea. If the sand is salt ridden then the structures would be weakened over time due to the rusting of the reinforcing steel inside the concrete. The buildings would be fine if that sand had been washed sufficiently or simply came within specification without further processing.
How much sand comes from dredging operations? Much less than you're led to believe. Ships are a pain in the arse and you can't see below the water. Even land based dredging from wet pits or lakes is thwart with difficulty. I've seen the figures on this and sand dredging is still the little bedfellow on the block in terms of the whole.
3. Recycling and Blending.
Not just glass, but concrete can be recycled also. Valuable sand and other aggregates can be re-extracted. This extends the life of existing in-ground resources. But also overlooked is blending the sand. That is, taking some man-made, some natural and maybe some recycled resource and blending them together. A pugmill or similar process can do this most effectively.
4. Concrete
There are few alternatives to this amazing stuff called Portland Cementous Concrete. Our world does not function without it and we have got to learn to manage it. People talking about straw bale houses is not the answer. Yes we can use wood and steel and such but what the Romans knew all along and the rest of the world woke up to in the nineteenth century is that Concrete is the answer. If in doubt concrete it.
If you have a sand deposit and don't know what to do with it, or need help in any way, then please contact me using the contact form on this page. I'm here to help.
Showing posts with label Sand. Show all posts
Showing posts with label Sand. Show all posts
December 15, 2017
January 26, 2017
Market Report UK
Looking at the UK, a situation I've been well aware of for some time never improves. Depending on your point of view, this is either a problem or an opportunity.
I'm talking about the supply of construction materials, namely sand and gravel supplies; and in the broader context all quarried materials, ready-mix concrete, and other products that consume crushed and processed stone.
The UK has the problem of steadily depleting reserves. The sand and gravel reserve base is most stark, there the replacement rate is a low 61%. What that means is that for every 100 tonne of sand sold, only 61 tonne is replaced. What am I going on about?
If you're extracting and processing sand, an important component in concrete and asphalt particularly, you need to have the stuff in the ground to extract. Imagine all of the UK's reserves being in one place, a huge tract of land (it isn't, actually it's spread out amongst hundreds of sand pits). As you dig, process and sell the sand just below the surface, the hole keeps getting bigger. Then to replace what you sell, you buy some land off the neighbour, but never as much as the volume you sell out of the gate. Do you see? Eventually your reserves run critically low and you go out of business. No construction supplies business for you.
But wait, that's not the first and last word on the subject I hear you say, there are other options which can be explored, and you'd be right. Dredging offshore for sand below the surface of the water. Okay, that's possible and already done. Then there is manufactured sand, never quite as good but you can do that. Okay, that's done too but the hard rock quarry environment is only just managing to increase its reserves from where they are now and not at the pace the natural sand deposits are being depleted. Then you can import sand from somewhere else I hear you say. Fine that too I answer, but sand is high volume low value and barging from other countries is expensive.
So what is going to happen to the UK? The price of sand and gravel must rise, that's what. And rise a lot over the next twenty years. That's because it takes fifteen years just to get a new sand and gravel pit on stream from initial proposal, so even if they went gangbusters right from this day forward they'd still end up sand critical.
This is a lesson in not allowing environmental nut-jobs anywhere near proper planning, real world industry with consequences. But for the investor, this is heaven sent. Investing in existing sand and gravel reserves is money in the bank. That message comes with qualifications though, naturally, as the company that does the work has to be well managed.
What candidates exist to get involved with? The list is; LafargeHolcim (which owns the UK's Aggregate Industries), HeidelbergCement (which owns Hanson), CRH (Tarmac), CEMEX and Breedon. Of these, Breedon is the UK specialist and heavily into rock products, see them here...https://www.google.com/finance?q=LON:BREE
Breedon are small and quite acquisitive, you can see their share price keeps climbing and their price to earnings is quite high at 31., maybe too high. I'll leave it for you to decide if you're comfortable with that.
Then you can also look for private companies to invest in, with focus on sand and gravel. Most of these are tightly held, I'm not saying any of the following are for sale or any share of them, but they're good businesses and this is the type of thing to look for:
http://www.rotherhamsandandgravel.co.uk/about.aspx
http://www.sandandgravel.uk.com
http://www.bromfieldsand-gravel.co.uk/Content.aspx?id=1
Sand and gravel UK.
I'm talking about the supply of construction materials, namely sand and gravel supplies; and in the broader context all quarried materials, ready-mix concrete, and other products that consume crushed and processed stone.
The UK has the problem of steadily depleting reserves. The sand and gravel reserve base is most stark, there the replacement rate is a low 61%. What that means is that for every 100 tonne of sand sold, only 61 tonne is replaced. What am I going on about?
If you're extracting and processing sand, an important component in concrete and asphalt particularly, you need to have the stuff in the ground to extract. Imagine all of the UK's reserves being in one place, a huge tract of land (it isn't, actually it's spread out amongst hundreds of sand pits). As you dig, process and sell the sand just below the surface, the hole keeps getting bigger. Then to replace what you sell, you buy some land off the neighbour, but never as much as the volume you sell out of the gate. Do you see? Eventually your reserves run critically low and you go out of business. No construction supplies business for you.
But wait, that's not the first and last word on the subject I hear you say, there are other options which can be explored, and you'd be right. Dredging offshore for sand below the surface of the water. Okay, that's possible and already done. Then there is manufactured sand, never quite as good but you can do that. Okay, that's done too but the hard rock quarry environment is only just managing to increase its reserves from where they are now and not at the pace the natural sand deposits are being depleted. Then you can import sand from somewhere else I hear you say. Fine that too I answer, but sand is high volume low value and barging from other countries is expensive.
So what is going to happen to the UK? The price of sand and gravel must rise, that's what. And rise a lot over the next twenty years. That's because it takes fifteen years just to get a new sand and gravel pit on stream from initial proposal, so even if they went gangbusters right from this day forward they'd still end up sand critical.
This is a lesson in not allowing environmental nut-jobs anywhere near proper planning, real world industry with consequences. But for the investor, this is heaven sent. Investing in existing sand and gravel reserves is money in the bank. That message comes with qualifications though, naturally, as the company that does the work has to be well managed.
What candidates exist to get involved with? The list is; LafargeHolcim (which owns the UK's Aggregate Industries), HeidelbergCement (which owns Hanson), CRH (Tarmac), CEMEX and Breedon. Of these, Breedon is the UK specialist and heavily into rock products, see them here...https://www.google.com/finance?q=LON:BREE
Breedon are small and quite acquisitive, you can see their share price keeps climbing and their price to earnings is quite high at 31., maybe too high. I'll leave it for you to decide if you're comfortable with that.
Then you can also look for private companies to invest in, with focus on sand and gravel. Most of these are tightly held, I'm not saying any of the following are for sale or any share of them, but they're good businesses and this is the type of thing to look for:
http://www.rotherhamsandandgravel.co.uk/about.aspx
http://www.sandandgravel.uk.com
http://www.bromfieldsand-gravel.co.uk/Content.aspx?id=1
Sand and gravel UK.