25th April 2017
Asteroid mining is "more realistic than perceived"
Goldman Sachs has advised its clients that asteroid mining for platinum may be financially viable in the not-too-distant future, with potentially massive rewards.
Mining for resources in space was once considered to be science fiction; the kind of venture that lay centuries away. In recent years, however, it has begun to be taken more seriously. Two companies – Planetary Resources and Deep Space Industries – have sprung up, with teams working to design and build spacecraft capable of locating, prospecting and eventually landing on near-Earth objects to extract materials.
Last year, the Luxembourg government partnered with Planetary Resources to develop the first commercial asteroid prospecting mission, which is now planned to take place by 2020. Meanwhile, in anticipation of this nascent industry, the U.S. government has introduced legislation to encourage the commercial exploration and recovery of materials from asteroids, recognising the right of citizens to own space resources they obtain as property.
Financial services giant, Goldman Sachs, has now acknowledged these emerging opportunities. In a 98-page report to their clients, Noah Poponak and his team of analysts write: "While the psychological barrier to mining asteroids is high, the actual financial and technological barriers are far lower. Prospecting probes can likely be built for tens of millions of dollars each and Caltech has suggested an asteroid-grabbing spacecraft could cost $2.6bn."
For comparison, the total cost for setting up a rare earth metal mine on the ground is typically around $1 billion. However, the cost of getting into orbit has fallen dramatically in recent years and is likely to continue falling in the near future, thanks to a new generation of reusable rockets from the likes of Elon Musk's SpaceX and Jeff Bezos's Blue Origin, as well as other companies focused on the "ultralight" class.
Longer term, the demand for precious metals is also likely to increase as these resources become ever scarcer here on Earth. Furthermore, the rewards for successfully extracting materials from asteroids will be colossal, providing a great incentive for venture capitalists.
"Space mining could be more realistic than perceived," the Goldman Sachs report continues. "Water and platinum group metals that are abundant on asteroids are highly disruptive from a technological and economic standpoint. Water is easily converted into rocket fuel, and can even be used unaltered as a propellant. Ultimately being able to stockpile the fuel in LEO [low earth orbit] would be a game changer for how we access space. And platinum is platinum. [...] A single asteroid the size of a football field could contain $25bn- $50bn worth of platinum."
Asteroid mining firms could even be victims of their own success, with previously rare commodities suddenly becoming abundant and cheap – similar to what happened with aluminium during the 19th century after the invention of electrolysis: "Successful asteroid mining would likely crater the global price of platinum, with a single 500-meter-wide asteroid containing nearly 175X the global output."
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