The sand and gravel industry faces a gap as high as 80%.

01. With major infrastructure projects underway, sand and gravel once again face opportunities!

Under the impact of the pandemic, since workplaces across various regions gradually resumed operations after the Spring Festival, multiple provinces have released their 2020 project investment plans. As of March 20, 25 provinces and municipalities—including Beijing, Hebei, Shanghai, Guangdong, Sichuan, Ningxia, and others—have announced a total of 22,000 projects with combined investments reaching 49.6 trillion yuan, of which 7.6 trillion yuan is earmarked for planned investments in 2020 alone. Increasingly clear signs indicate that large-scale infrastructure development is emerging as a new driving force behind economic growth.

Accelerate progress, expedite approvals, and speed up project commencement. Under the pressure to stabilize growth, the pace of approving infrastructure projects has also been picking up recently.

Data released by the National Development and Reform Commission (NDRC) show that, as of March 20, NDRC-approved infrastructure projects totaled 228.605 billion yuan, an increase of 93.029 billion yuan compared to the same period last year. Meanwhile, as of February 25, the resumption rate for 533 major national transportation projects nationwide reached 70.17%.

02. Who would have thought that even sand could "suffer from famine"?

Meanwhile, resource and environmental constraints—and the associated regulations—are steadily tightening, leading to bans or restrictions on natural river sand extraction. As a result, the global shortage of sand is intensifying, exacerbating the growing imbalance between supply and demand for construction aggregates.

Since 2018, many regions across the country have相继 faced critical shortages of sand and gravel aggregates, with "one ton of sand being hard to find" becoming almost the norm. Data shows that Henan Province has an annual demand for construction sand of approximately 210 million tons, yet the province’s officially approved river sand extraction capacity stands at only about 40 million tons—leaving a gap exceeding 80%. Meanwhile, Fujian Province forecasts an average annual demand for construction sand of 110 million cubic meters from 2019 to 2021, yet its supply shortfall remains as high as 75%.

In Hubei, some high-speed rail, airport, and highway projects have been forced to halt construction due to the risk of supply disruptions in sand and gravel—key raw materials for concrete production—leaving construction firms struggling bitterly. Meanwhile, provinces such as Hunan, Jiangxi, Zhejiang, Shaanxi, and Hainan have also seen repeated "sand shortages," while in the Huizhou area of Guangdong Province, some sand quarries have even adopted a "lottery-based supply system," limiting daily deliveries of sand and gravel to specific quotas.

In fact, in the past, the sand and gravel aggregates used in China were almost entirely natural materials directly sourced from riverbeds and mines. However, years of extensive mining have put these resources at risk of depletion. As China continues to advance its ecological civilization initiatives, growing resource and environmental constraints—and increasingly stringent regulations—have intensified the supply-demand imbalance, driving up sand and gravel prices further. In some regions, prices have surged by nearly 100%. Faced with this situation, coastal areas such as Guangdong, Fujian, Zhejiang, Jiangsu, and Hainan have already begun importing large quantities of sand and gravel from countries like Malaysia and North Korea.

Under the resource supply crisis, where does the future lie for the sand and gravel industry?

03. Mechanically Produced Sand Becomes the Market's "New Favorite"

1. Resource Advantages: It can utilize various waste resources, such as tailings, construction debris, pebbles, and stone chips, effectively addressing environmental pollution while aligning with energy-saving and eco-friendly principles.

2. Quality Advantage: The raw materials are clean, and the aggregates feature continuous grading. The fineness modulus of the manufactured sand can be adjusted according to the concrete and mortar mix designs, meeting the requirements of various dry-mix mortars, commercial concrete, asphalt concrete, high-performance concrete, and more.

3. Management Advantages: We have a stable legal entity, operate under mining permits, and maintain a fixed business location. This effectively prevents illegal and excessive mining, safeguards the environment, boosts government revenue, and enhances the comprehensive utilization of resources.

4. Cost Advantage: Preparing concrete can save 10%-30% of cement; when used with dry-mix systems, it eliminates the need for drying, reducing drying costs by 10 yuan per ton.

Mechanism sand has found widespread application in China. It is understood that the earliest domestic use of mechanism sand and gravel dates back to several major projects in Beijing during the early years of the founding of New China. In 1958, it was also employed in the construction of the Maotiao River cascade hydropower station in central Guizhou Province. More recently, high-quality mechanism sand has been utilized in the construction of landmark projects such as the Hong Kong-Zhuhai-Macau Bridge and the Three Gorges Dam.

“High-quality manufactured sand and gravel are industrial products mass-produced using state-of-the-art crushing and screening equipment, and their performance surpasses that of natural sand and gravel.” Hu Youyi believes that while natural sand and gravel have been shaped by millennia of river erosion, resulting in distinct surface characteristics and forms compared to manufactured materials, advancements in manufacturing technology and continuous improvements in equipment capabilities now allow manufacturers to produce sand and gravel that not only match but even outperform their naturally sourced counterparts.

The industry generally believes that industrially produced products outperform natural ones in terms of quality consistency and other aspects. Therefore, manufactured sand and gravel can fully replace natural sand and gravel—and even offer greater advantages when used in high-performance concrete.

On November 4, 2019, ten departments—including the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Natural Resources, and the Ministry of Ecology and Environment—jointly issued the "Several Opinions on Promoting High-Quality Development of the Mechanically Processed Sand and Gravel Industry," emphasizing the rational allocation of mining rights for sand and gravel resources, standardizing the management of these resources, and encouraging the use of waste rock, tailings, and other materials to produce mechanically processed sand and gravel, thereby conserving natural resources.

The aforementioned "Opinions" call for coordinated planning and layout, aiming to establish a domestically rational mechanism for supplying manufactured sand and gravel. Based on the needs of key city clusters such as Beijing-Tianjin-Hebei and its surrounding areas, the Yangtze River Delta, and the Pearl River Delta, as well as infrastructure development requirements in central and western regions, mining rights for sand and gravel resources should be allocated appropriately. Additionally, efforts should be made to diversify sand and gravel sources, standardize resource management, and encourage the use of waste rock and tailings from mines producing iron, molybdenum, vanadium, titanium, and other minerals to produce manufactured sand and gravel. This approach will help conserve natural resources and foster industrial clustering.

The "Opinions" emphasize the need to strengthen the integration of sand and gravel resource development, promote large-scale and intensive production of manufactured sand and gravel, and establish a number of large-scale production bases. It also encourages the development of integrated industrial parks that combine sand and gravel, cement, concrete, and prefabricated building sectors, leveraging their clustering benefits. By 2025, the goal is to establish a relatively complete and rational supply assurance system for manufactured sand and gravel, significantly boosting the proportion of high-quality products. Additionally, the capacity of ultra-large manufacturers producing over 10 million tons annually will account for 40% of the total industry output, while the share of manufactured sand and gravel produced using tailings and waste rock will see a notable increase.

The industry believes that these guiding opinions on the development of China's sand and gravel sector play a pivotal role and hold significant importance in driving the industry's transformation and upgrading, technological advancement, and high-quality growth, ultimately propelling China's sand and gravel industry into a new era of sustainable, high-quality development.

Common mechanism sand materials

① Construction Waste: Crushed stone, concrete blocks, and broken bricks and tiles from construction waste can all be used as sand and gravel aggregates. By utilizing these materials as raw inputs to produce manufactured sand, the cost of raw material procurement can be significantly reduced.

② River pebbles: Pure natural stone materials characterized by their beautiful colors, non-fading properties, non-toxicity, and high hardness. They serve as a green raw material for sand production, and mechanism-made sand derived from river pebbles offers certain advantages when used as a substitute for natural sand.

③ Quartz sandstone: A type of aggregate containing over 90% quartz, offering excellent performance in terms of particle shape and strength, making it one of the more commonly used raw materials for manufactured sand production on the market.

④ Sandstone: A sedimentary rock primarily composed of feldspar and quartz, characterized by its stable structure and containing more than 50% sand grains. It is a common raw material for manufactured sand production, but during the crushing process, it tends to generate a relatively high amount of stone dust. Therefore, when producing sand, it’s essential to select sand-making equipment with excellent dust removal capabilities.

⑤ Mineral slag: An industrial waste with a wide range of sources, it is relatively low-cost in the actual sand-making process and also a commonly used raw material for sand production.

04. These issues urgently need to be addressed.

"Led by technology and driven by cross-sectoral integration, we are advancing the high-quality, green development of the sand-and-gravel industry. Yet, at the same time, we must squarely acknowledge the existing challenges and shortcomings," openly stated Hu Youyi, President of the China Sand and Gravel Association. "Indeed, the sand-and-gravel aggregate sector still faces several pressing issues and contradictions that urgently require solutions."

First, managing the sand and gravel industry involves multiple departments, making coordination and regulation particularly challenging. The extraction, production, and application of sand and gravel span across various sectors, including natural resources, agriculture, forestry, water conservancy, maritime affairs, and urban-rural construction. As a result, the sand and gravel industry has long faced issues of overlapping and redundant management among these departments. There is an urgent need to establish a collaborative working mechanism involving local governments, industry associations, and enterprises, as well as to develop standardized industry entry criteria.

Secondly, unlicensed mining and indiscriminate excavation continue to persist despite repeated prohibitions. Driven by profit, some regions still witness disorderly competitive practices such as unauthorized mining, reckless over-extraction, and unfair, non-transparent competition. This has led to vicious price wars over low-cost, substandard sand and gravel, disrupting the market and hindering the adoption and growth of high-quality manufactured sand and gravel products.

Once again, efforts in scientific research and development, standardization, and quality testing remain insufficient. Surveys reveal that China currently lacks adequate investment in R&D related to manufactured sand and gravel, resulting in an overall level that lags behind others. Moreover, there are no dedicated R&D or design institutions specifically focused on sand and gravel, and even major universities and colleges do not offer specialized programs in this field. Additionally, both national and corporate testing facilities, along with the relevant mechanisms, still require further improvement.

Industry insiders generally believe that streamlining management functions, strengthening industry oversight, refining supporting policies, encouraging scientific and technological research and development, enhancing the quality control system, and improving standards and regulations are essential steps to resolving existing challenges and fostering the healthy, sustainable growth of the mechanism sand and gravel industry.

At the same time, based on the development trends of the mechanism sand and gravel industry, it is necessary to timely formulate and release relevant industrial policies such as entry criteria for the industry. These policies should strengthen requirements across various aspects, including planning and layout, process equipment, production scale, product quality, energy consumption, cleaner production, environmental protection, comprehensive resource utilization, and operational practices. Additionally, enforcement efforts must be stepped up through intensified supervision and inspection, ensuring that illegal activities like unlicensed mining and indiscriminate extraction are firmly addressed and eliminated. Moreover, regions may establish a filing system for sand and gravel supply enterprises, strictly prohibiting sand and gravel products produced in violation of regulations from entering the market.

Additionally, it is also necessary to integrate regional resource distribution, market demand, quality standards, and transportation/logistics conditions when planning and arranging green, environmentally friendly mechanism sand and gravel production bases. During the layout of these bases, scientific planning should be implemented for mining areas—from extraction all the way through post-mining restoration—and enterprises must be rigorously required to adhere to the planned guidelines for both extraction and remediation, ensuring that after mining activities, the sites can meet the criteria for either ecological restoration or secondary development.