Quartz

Quartz

Postby winston » Thu Apr 24, 2014 6:40 am

The U.S. shale boom is sending another surprising commodity much, much higher by Matt Badiali

The U.S. is at the beginning of a big shale oil boom. Some researchers, like Greg Zuckerman, author of The Frackers, think that in a few years the U.S. could become the largest oil supplier in the world.

One of the best ways we can start to profit from this growing trend is through one of the most abundant minerals on Earth... quartz.

The modest quartz is a simple crystal of silica and oxygen – the two most abundant elements on Earth (oxygen is No. 1 and silica is No. 2).

Quartz grains wind up in nearly all the rock in the world. It's such a hard, resistant mineral that it doesn't wear out. It isn't reactive, so it lasts forever. The quartz born billions of years ago now graces beaches around the world.

It is also one of the most useful commodities in the world. Quartz is in glass and computer chips. And it's in high demand for hydraulic fracturing, "fracking."

Fracking, as you may know, is one of the key technological developments that sparked the boom in oil production for shale-rock formations. Fracking involves creating a careful series of cracks in the shale to allow the trapped oil and gas to flow out and into the well. Quartz sand is used as a "proppant." That means it is forced into the cracks made in the rock to "prop" them open. The trapped oil and gas can then easily flow out between the grains.

But you can't just scoop up any sand lying around and pump it into a shale well. Fracking sand is special. It must be pure, more than 99% quartz. (For comparison, regular beach sand is typically 80%-90% quartz.) The grains must stand up to 4,000 pounds of crushing power. They must also meet a minimal roundness standard.

As the shale plays move into development, the number of shale wells drilled will continue to rise. And that's good news for sand miners that can supply the quartz needed for these operations… miners like Silica Holdings. Its shares are at 52-week highs.

This is a trend that will continue for the long term. I expect the demand for quartz sand to continue to grow for many years.


Source: S&A Resource Report
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