Commercial Profitability of Offshore Sand and Gravel Mining in Southern California: An Analysis of New Entries

Sand and gravel are primary resources used in many phases of construction and to maintain southern California´s valuable beaches and harbors. Deposits of saleable-grade material under present political and economic conditions are becoming depleted. Although many land-based deposits are lost to competing land uses and mining of such deposits is generally opposed by urban communities, offshore mining of sand and gravel for use as construction aggregate is below the current rate of market interest (10%). The reduced profitability of offshore mining is chiefly due to high initial capital outlay and relatively high operating costs. Investment in land-based deposits may be profitable under specified conditions.