Sand is India’s new gold

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Elliot writes*

Whereas the early pioneers of the world set out to find gold, one of the commodities of today is easier to find and in a certain sense in higher demand: sand. So, shortcut to getting rich? Forget about gold, dig up sand! Wait… actually, please don’t! First you are unlikely to find sand that satisfies demand standards, but more importantly, the price at which you might sell it for is very unlikely to cover the full cost of sand mining. Take India for example, where demand for sand is so high it is being mined at all costs.

With India’s growing population and increasing urbanization there is more need for housing, asphalt, and any other construction which requires cement. The main ingredient? You guessed it: sand. As a result, demand for sand has skyrocketed, and in an industry where it is estimated 2.2 billion tonnes of sand is needed annually, there is still excess demand which lures profit-seekers into the sand mining process. India, which is planning on building the equivalent construction of a new Chicago every year, is iconic for digging up sand. Since normal (legal) sources are not plentiful enough to face the domestic demand, local entrepreneurs have taken it on themselves to meet this demand. It is estimated that around 32% of demand is met by illegal procurement.

This however poses a real environmental threat. Sand is a common pool resource, i.e. locals cannot exclude people from mining sand, and it is depleteable, which means that new sand mines are being forged left and right, after old ones are depleted and left amidst environmental ruins. Wait, I know what you are thinking: Excludable? What about property rights? Well unfortunately property rights do not mean much to the sand mafia that see no problem dredging rivers, beaches, and even privately-owned land if they know there is good sand to be found there.

It should come to no surprise that illegal sand mining (not just in India) comes at tremendous costs. Its direct consequence is that is results in the natural degradation of farmland, risk of salinizing otherwise fresh water, and of course the disappearance of beaches. Moreover, the removal of sand results in damage to existing infrastructure, which for instance resulted in a bridge closing down in Mumbai district just a few days ago.

From a socio-economic perspective, the intrusion of property rights goes hand in hand with violence. The sand mafia has been reported committing numerous murders; and are known not to be shy intimidation and corruption practices. Moreover, the loss of income suffered by this land intrusion and the blatant disregard for law are likely not the mafia’s concern. The profits for sand far outweigh their moral obligation to the perseverance to nature and community.

Currently the Indian government is trying their best to restrict illegal sand mining by improving monitoring abilities (using GPS for instance to track down illegal sand mines), and by increasing penalties for these felonies by confiscating their trucks if criminals are caught. Whether these will be effective however is still to be determined. Corruption is a big issue on local scales however, which the sand mafia is more than happy to take full advantage of.

Sand mining remains a difficult topic nonetheless. It is extremely difficult to regulate, and moreover it begs the question of ethical consideration. Illegal sand miners know they are breaking the law, but can one really blame them if they are struck by this opportunity to earn som hard needed money, even if that means breaking the law?

Bottom line: In a growing world, the demand for sand for construction (and other uses) is sharply increasing which has resulted in illegal sand mining. In India, the problem is so severe that sand mafia’s have started to organize this crime. Being profit motivated and operating in a black market they have full disregard for the environmental degradation and intrusion of property rights in mining sand.

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* Please help my environmental economics students by commenting on unclear analysis, other perspectives, data sources, etc. (Or you can just say something nice

Source: http://www.aguanomics.com/2017/11/sand-is-indias-new-gold.html