River Sands Project Technical Detail
River Sands Project
Sand is by far the largest globally mined commodity (Figure 1), outstripping the shipments of coal, iron ore and grain. Sand is not traded on any recognised exchange, but the United Nations (UN) estimates 40 billion tonnes of sand1 is mined globally each year2. Putting this in context, the next largest bulk commodity, in terms of tonnage moved, is coal at about 3.5 billion tonnes in 2018 (International Energy Agency, IEA).
The global sand market however lacks transparency with no central market due to localised supply/demand relationships. This makes it difficult to publish a commodity price in the usual sense. Potential offtake parties, however, are always on the search for good quality material and will pay the price needed to secure its sale.
The consumption of sand in the developing world is voracious. Sand, or silica dioxide (SiO2), has in terms of bulk tonnage three main uses:
- Land reclamation and island building (largest bulk commodity use at 28 billion tonnes per annum),
- The manufacture of concrete (12 billion tonnes per annum), and
- Specialised glass manufacture, such as that used for phone screens (cost per tonne currently exceeds USD$1000/tonne). Total usage is approx. 300Mt, or 0.3 billion tonnes, per annum globally.
The third usage represents the target area for most silica sand miners as the high value, high margin products capable of absorbing high processing and transport costs. The graph shown in Figure 1 illustrates the massive tonnage difference estimated for the two major uses in comparison with the higher value specialised glass manufacturing. The annual usage of other main global bulk commodities are also graphed for comparison.
Cauldron has recognised that high-quality river sand, as a bulk commodity in its own right, is distinct from desert, dune or marine sand which is found in relatively high quantities. Ideally, river sand comprises more angular particles with higher silica content, naturally sized by river action and made angular by the reduced period of erosion in river systems, as opposed to marine or desert environments. These angular particles are capable of interlocking which offers greater load bearing capacity when mixed with cement, a quality which makes river sand much sought after for construction. Recent global growth, particularly in Asia, has created a scarcity in this commodity and an associated demand-driven price rise sufficient to justify sea-borne transport.
As an unregulated and unmeasured market, we can only estimate or derive the global production demand of construction sand. This market demand is highly coupled to growth and the associated use of concrete manufacture when mixed with cement and aggregate. Annual production of cement is measured and recorded. In 2019, approx. 4 billion tonnes of cement were manufactured and used globally with over 50% used in Asia, consistent with the previous five years (Figure 2).
1 UN Environment 2019; Sand and Sustainably, Finding new solutions for Environmental Governance of global sand resources
2 Driven to Extraction Can Sand Mining Be Sustainable? Oli Brown, Hoffman Centre, Chatham House https://hoffmancentre.chathamhouse.org/article/driven-to-extraction-can-sand-mining-be-sustainable/
In December 2020, Cauldron entered agreement where it will stage the consideration payments for 100% ownership of eight high-quality river sand exploration licences and mining leases, covering a total of 482 km2, situated at the mouths of the Fitzroy, Ashburton and Gascoyne rivers in Western Australia.
Cauldron’s acquisition of the River Sand leases affords the potential of low-cost sand supply to target premium seaborne export markets, and helps to fulfill part of the Company’s ongoing commitment to achieving net zero carbon footprint. This is achieved by the educed mining, handling and truck haulage involved which invests less carbon into the product and, thus, reduces the carbon footprint of the supply of sand.