Caixin
May 14, 2019 08:24 PM
BUSINESS & TECH

Local Governments Working Hard to Keep Sand From Slipping Through Their Fingers

A sand and gravel plant on the Yangtze river in Wuhan, Hubei province in May 2015. Photo: VCG
A sand and gravel plant on the Yangtze river in Wuhan, Hubei province in May 2015. Photo: VCG

Several local governments are going to great lengths to control their supplies of sand and gravel in the wake of a crackdown to curb the environmental damage from mining these essential building materials.

The recent trade and price restrictions on these components illustrate the effects of a major nationwide crackdown on environmentally destructive sand and gravel mining that has caused shortages across the country, leading to a boom in overseas imports.

Last week, authorities in Ziyang county in the northwestern province of Shaanxi announced that the country’s water bureau will monitor all movements of the sand and gravel until the end of September, making it illegal to sell sand outside the region, with sand and gravel being reserved for key projects. The bureau will also control the prices of the materials.

Similarly, authorities in Wan’an county in Southeast China’s Jiangxi province, announced in April that buyers of these materials must first receive government approval slips, and are not allowed to resell to other buyers — a policy decision reminiscent of the days of the planned economy.

Sand and gravel form the bedrock of China’s rapid urban and infrastructure development, with the country accounting for over half of the world’s supply and demand. Demand rose by 540% over the last two decades, according to a U.N. Environment report released last week.

The best building materials tend to be extracted from major rivers like the Yangtze, but often at a great environmental cost. “The increasing volume of aggregates extracted, often illegally, from riverine and marine ecosystems results in river and coastal erosion, [and threatens] freshwater and marine fisheries and biodiversity,” the report noted.

In the face of such threats across China’s waterways, the Ministry of Water Resources in June launched a major nationwide crackdown (link in Chinese) on illegal mining near fragile rivers. Yet this has led to sand and gravel shortages in some regions, with prices for both rising by about 25% last year in the Yangtze River Basin region, the country’s main production area.

While the government crackdown on illegal mining has depressed the supply of sand and gravel, rising prices also incentivize further illegal activity by increasing the potential profits to be had, according to a recent piece (link in Chinese) in the Sichuan Daily reproduced on the website of industry body China Sandstone. Last year, authorities in the southwestern province of Sichuan arrested 168 people and investigated four officials in relation to illegal sand and gravel mining, seizing 62.6 million yuan ($9 million) of assets the report said.

The rising prices are also leading to a boom in imports from overseas, particularly in the southern island province of Hainan. The region is expected to need around 28.48 million cubic meters (1.01 billion cubic feet) of sand each year to support of its planned major free trade zone, but the province can only supply less than 10 million cubic meters. With this in mind, state-owned Hainan Development Holdings Co. Ltd. imported sand from the Philippines for the first time in February, while authorities in the provincial city of Danzhou announced earlier this year that the city plans to import 2 million cubic meters of sand from Malaysia this year.

Similarly, even the eastern province of Zhejiang, located on the Yangtze River Delta, imported 556,000 tons of sand from Malaysia in February, while the volume of sand and gravel imported via Guangzhou rose 70.9% in the first quarter of this year, according to the Guangzhou Port Group.

A previous version of this story mistakenly stated that sand and gravel are raw materials for cement. They are not, but rather they are key components in concrete.

Contact reporter David Kirton (davidkirton@caixin.com)

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