Asteroid mining economics

Hey everyone. I’ve got a few asteroid mining articles to talk about. This article by Jonathan O’Callaghan discusses the asteroid mining plans of Planetary Resources Arkyd 3 Reflight (A3R) CubeSat, which will spend 90 days in orbit testing electronic systems and software. This is an early step in the plans of Planetary Resources to return commercial quantities of resources from asteroids to Earth. The article is somewhat critical of the reality and likelihood of turning a profit through asteroid mining, citing ‘market saturation’ as the reason. Basically by drastically increasing the supply of platinum group and rare earth metals in the market the price will drop (and some asteroids are estimated to have a LOT of PGM and REMs! Atlantis has a total estimated resource value of over 42 trillion dollars!). Therefore the profitability of the PGM and REM industry, both terrestrial and off-Earth, will plummet.

Not a bad argument, and that’s certainly highly likely, but I think the author misses one of the key opportunities of acquiring resources from asteroids. They are already in space. Given that, by my last reading of the value, it costs $50,000 US to put 1 kilogram of material in space due to fuel costs, being able to acquire resources in space and bring them to orbit for less than $50,000 per kg would be a huge boon to the space exploration industry. Even if we can only create fuel initially (by mining water ice on asteroids and using electrolysis to break it down into hydrogen and oxygen, which can then be used as fuel and oxidiser) this can drastically reduce space travel costs. Not to mention that it costs hundreds of thousands of dollars a year to keep a satellite in a stable orbit, making the potential market for space-based fuel huge. Eventually we may even be able to utilise nickel and iron to directly manufacture space equipment in orbit. This article discusses another way that an asteroid mining company can make money. To overcome the market saturation issue, a company could prepare to mine a large volume of PGMs from an asteroid then sell PGM futures, essentially a contract for assets bought at agreed prices but delivered and paid for later. Then when the market is flooded and the price of PGMs drops, they swoop in and buy up all the now cheap terrestrial PGM mining and processing business and infrastructure using their asteroid money. They can then just announce that, due to the price drop, they won’t be mining any more asteroids. The prices will increase and hey presto they’ve just acquired a near monopoly on the terrestrial PGM business. All perfectly legal. Apparently. I think it would be a missed opportunity to only see asteroid mining as returning a resource to Earth. There are other potential ways for an asteroid mining company to supplement their profit. For example, the first company to regularly send probes to asteroids and return material could partner with research organisations and sell data and samples. For more about Planetary Resources’ plan to develop asteroid resources, check out their site here and their Youtube video here on the potentially trillion dollar size of the market for fuel in space. Until next time. Note – I got my figure for the value of Atlantis from Asterank, the Asteroid Database and Mining Rankings.

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