Economy & Market
Where there is sand, there is a way!
Vivek Maheshwari and Bhavesh Pravin Shah of CLSA
reviews the problems of sand mining in India and provides a way forward for natural sand.
Sand is a non-negotiable resource for the construction sector and, interestingly, is classified as the fourth most important 'minor' mineral by the mines ministry. Sand availability was a problem at different points of time in the past few years but 2017 was perhaps the worst year with a series of sand mining restrictions across several states due to non-compliance with environment norms. This had an obvious impact on the construction industry in several states and this in turn impacted cement demand too. Sand availability, however, has been improving with states revising their mining rules. M-sand too has been gaining acceptance albeit at a slower pace. Based on our industry interactions, it appears that sand-related problems should be resolved during the course of 2018 although recent media reports still point to some uncertainties.
Sand-related problems are not new...
- Sand mining has a negative impact on the environment as it causes degradation of rivers and lowers the stream bottom, leading to bank erosion and thereby floods.
- Enlargement of river mouths, loss of water and destruction of the aquatic habitat also get triggered by excessive sand mining.
- There has been a widespread problem of sand mining in India, flouting environmental rules and damaging the environment.
- The Supreme Court, in 2012, notified that sand mining operations should be licensed and monitored; in effect, this made ongoing sand mining operations illegal.
... but 2017 perhaps was the worst
Following the Supreme Court directive, states had put restrictions on sand mining in the past five years but the problem had brief impact over a relatively short timeframe. In 2017, though, following National Green Tribunal (NGT) concerns about illegal mining, several states formalised sand mining and even banned it in the interim. As a result, sand availability became a severe issue in several states and, even now, it is a problem in several of the states, although the worst phase seems to be over.
The way forward for natural sand...
Sand availability has improved in Madhya Pradesh, Bihar, Tamil Nadu, Uttar Pradesh. However, there continue to be problems in Rajasthan, where the Supreme Court intends to study and examine a report on replenishment of 19 mines. Madhya Pradesh now sells sand through an online portal. Bihar, Telangana and Tamil Nadu too have increased transparency in the sand trade by leveraging technology. Uttar Pradesh has e-auctioned mining leases in all districts except one, resulting in a revenue windfall of Rs26.5bn for the exchequer. Media reports indicate regulatory issues persist and may not go away for some time.
... as well as M-sand
Sand mining problems have opened up another avenue for the industry which is 'manufactured sand' or simply, M-sand. M-sand has existed for a long time but recent events have accelerated its growth. M-sand is formed by crushing hard granite stone - it is cubical in shape with grounded edges, washed and graded with its size being less than 4.75mm. We also understand that M-sand's gradation, shape, smoothness and consistency make it better than even natural sand for use in construction. However, buyer concerns persist and, hence, acceptability is still somewhat sluggish.
Environmental effects of sand mining
Sand and boulders both are necessary to a river's existence. Excessive instream sand/gravel mining causes its degradation as it lowers the stream bottom and eventually leads to erosion of the river banks. Depletion of sand in the stream bed and along coastal areas causes deepening of rivers/estuaries and enlarges river mouths and coastal inlets. This leads to disturbances in the ecological balance in these areas. Additionally, this results in destruction of aquatic and riparian habitat, through changes to the shape of the river, and pollution of water bodies.
Triggers of the sand mining ban
Sand mining was declared illegal in February 2012 after the Supreme Court of India ruled that approval under the 2006 Environment Impact Assessment (EIA) notification is needed for all sand mining and gravel collection activities
According to the Geological Survey of India, riverbed mining causes several alterations to the physical characteristics of both rivers and riverbeds which severely affect ecological systems of river plants and animals. Excessive sand mining was reportedly one of the key reasons for major floods in the state of Bihar in 2017.
Additionally, there was ambiguity about best practices in mining methods that were used to assess how much sand can be sustainably mined. Over the years, lack of clear guidelines to deal with sand mining operations along with inability of the authorities to regulate mining operations resulted in unscrupulous and illegal sand mining activities. For instance, in the state of Tamil Nadu, reportedly, three-fifths of overall sand mined in the past 17 years was illegal.
Illegal sand mining not only has huge implications for the environment but also leads to a colossal loss to the state exchequer. Following a Supreme Court directive, states put restrictions on sand mining in the past five years but the issue had a brief impact over a relatively short timeframe.
In 2017, though, following NGT concerns about illegal mining, several states decided to formalise sand mining and even banned it in the interim. Bihar, Madhya Pradesh (MP), Uttar Pradesh (UP), Tamil Nadu (TN), Rajasthan and Maharashtra the key states that clamped down heavily on sand mining ops in 2017.
Efforts to regulate and streamline mining
Madhya Pradesh was among the first to act and restructure the sand mining and sale process. It has allowed sand mining at key sites and now sells sand through its own simplified online portal.
Supply has improved across the state leading to a boost to construction. In Nov '17, the chief minister opened up the mining sector under a detailed process that involved obtaining an e-pass for mining, which would be verified by the 'sarpanch' (village head) to ensure royalty of Rs125/cubic metres is paid to the state government.
Similarly, Bihar, Tamil Nadu and Telangana too have launched online portals, mobile applications and GPS systems to track truck movements, etc to increase overall transparency in the sand trade.
Availability of M-Sand pan-India is still an issue
Currently, more than seven organised companies based in the South Indian states of Karnataka, Kerala and Tamil Nadu produce M-sand. Thriveni Sands, Poabs, Tavara and Robo Silicon are the key players with large-scale production on a daily basis. However, in west and north India, availability of M-sand is relatively limited.
The types of M-sand available include:
- M-sand for brick and block work: Laying bricks and block/masonry work
- Concrete M-sand: For all concreting purposes
- Plastering M-sand: External and internal plastering