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when my tegu is small and young, I use the peat moss (cocopeat) for him to burry. Now he is big and calm, so mostly he is free at the home garden. If the weather is bad,...I put him still into the indoor cage with lamps and cocopeat substrate....but peat moss retains many humidity, so better used if the cage is big enough I think
Most people use cypress mulch if its available to them, but for many its not. I dont like it because of risks of ingestion/compaction
Check out my thread on bioactive substrate;
http://www.tegutalk.com/showthread.php?tid=11961#axzz21LHCsjZd
if thats not feasible or practical for you, I recommend a soil and sand mixture. Its holds humidity and a burrow well, and they wont (typically) try to ingest it