By Christian Hellwig for Global Risk Insights
Due to natural erosion stemming from storms, tides, tornados, tsunamis, and rising sea levels, beaches are subject to constant attack. Because of these natural phenomena, large beach lines have been refurbished for decades in countries ranging from the USA to Indonesia in order to keep their pristine tourist destinations alive.
Despite this effort, an estimated 75 to 90 percent of the world’s natural sand beaches are about to vanish.
Illegal sand mining, defined as the stealing of sand or simply beach theft, has wreaked havoc in many parts of the world. Since the mid 2000s, illegal mining has caused severe local supply shortages and the destruction of multiple beach areas and coast lines across the globe.
The dramatic shift in natural sand availability has even triggered global sand wars, with mainly China, India, Singapore and the United Arab Emirates at their forefront.
An underrated hazard
Illegal sand mining is widely unknown to the general public, but forms part of an even larger problem. The looming depletion of pivotal natural resources, which are finite in their availability, threatens human and economic development at large.
Mankind and its insatiable demand for constantly higher levels of economic growth is the driving force behind the irreversible destruction of the planet’s natural resources, pushing the planetary boundaries to the limits and beyond a point of no return.
More importantly, without having key raw materials such as sand at its disposal, the current global construction boom will be bound to come to a halt. This undesirable development will dramatically hurt construction companies, private equity firms, real estate investors and national economies alike.
Why are we dependent on sand?
Despite surging desertification processes affecting more and more regions across the globe, including China, South Asia, California, and the African Saharan, a special kind of sand is substantially decreasing.
Sand is one key component to mix concrete. However, desert sand, which seems to stretch across the globe forever, does not serve this purpose due to its consistency and chemical properties. This is mainly due to its lack of silicon dioxide compounds, and the fact that desert sand is too fine and smooth, containing too much clay, iron oxides and lime.
By contrast, sand that is extracted from the bottom of oceans, beaches, rivers and gravel beds consists of minerals and metals such as titanium, thorium, silicon and uranium, which play a more crucial role in our daily life than most of us can imagine.
These mineral and metal components are used to manufacture microchips, silicon chips and solar panels, build houses or aircrafts, and to produce cosmetics, abrasives, glass, plastics, and toothpaste. To construct one single-family house requires about 200 tons of sand. According to the United Nations, the annual global consumption of sand amounts to an estimated 40 billion tons, with the global building sector accounting for 75%.
Urbanization and the global epicenters of construction
Two key factors drive the never ending need for sand: the global megatrends of urbanization, and rapid middle-class growth.
While the populations in Europe, the USA and Japan are expected to shrink in the long run, Sub-Saharan African, Arab and South Asian populations will massively scale up. In parallel, the demand for better housing, offices, shopping malls and infrastructure will skyrocket.
Apart from this, countries including Singapore, India, the United Arab Emirates (UAE) and China consume exorbitant quantities of natural resources, primarily for their domestic construction agendas. And this consumption is highly misallocated and unsustainable.
For instance, a key cornerstone of China’s domestic infrastructure policy is to accelerate urbanization, connecting its remote areas with highly developed cities in the Southeast, along the coastline, and around the Yangtze River. China is also building up five clusters of mega cities, which will provide living and working space for more than 500 million people.
Singapore has increased its city size by 20% since the 1960s. In order to meet the high demand for sand, it has been accused of launching sand wars with its neighboring states by “paying smugglers to steal entire beaches under the cover of the night.”
The UAE and other Gulf states, such as Bahrain, have been undertaking enormous land-reclamation projects, building some of the world’s highest skyscrapers. These projects have led to the exhaustion of all local sand resources. The UAE and others are currently purchasing sand from Australia to meet demand.
Lastly, Western industrialized states comprising Germany, Canada and the UK, and many take-off countries such as Brazil, Nigeria and Indonesia, report a growing construction industry output as well. This has further exacerbated the global demand for sand.
Beach theft logic and its environmental implications
The most common theft practice is for multinational companies to hire thieves or local residents to carve out millions of tons of coastline in night-time raids, sometimes using only their bare hands, shovels and buckets. Recent focus has shifted to seabeds, beaches and coastlines due to an almost near-depletion of the gravel and river sand resources in most parts of the world.
Those states being affected the most by global sand theft include Indonesia, India, Mexico, Cape Verde, Malaysia, Jamaica, New Zealand, Kenya, and many tiny island states in the Indian and Pacific Oceans and the Caribbean. As a rule, the sand mafia operates globally and within countries that are highly dependent on pristine beaches to attract tourists.
Beach theft often destroys the entire local marine ecosystem and ocean vegetation as thousands of ships vacuum up sand from the bottom of the ocean. Such practices leave a dead crater landscape behind, killing off all living things, barrier reefs and fisheries. It changes coastal current streams and disturbs the underwater.
Moreover, the lack of sand intensifies natural soil erosion even further, causing entire islands to sink and beachside communities to flood.
What does the future have in store?
The global infrastructure and construction boom is very likely to persist.
According to Global Construction 2025, emerging construction markets will see growth of 3 to 6% per year. In total, construction in 2025 is expected to exceed the value of $15 trillion. Sub-Saharan Africa is predicted to be the second-highest growth region, and China alone will account for 25% of global construction activity.
Furthermore, the most important sectoral indices, the Stoxx600 Banks and Stoxx600 Construction & Materials, report a recent increase of up to 70% or more. This largely accounts for good business performances of the leading construction companies, such as Berkeley Group (UK), Bilfinger & Berger (Germany), China Communications Constructions, Leighton (Australia), Skanska (Sweden) or Singapore Technologies Engineering.
The continued boom is bad news for the planet’s natural resources and those countries heavily dependent on tourism. Conspicuously, both the trend reports and the construction industry do not factor the contingency of finite resources into their estimates.