Off-Earth mining: get the business case right

I think that The Economist is a great magazine. Their insights, objectivity and priorities have always impressed me. But in their recent article on off-Earth mining, I think they got it completely wrong.

The problem is, they're thinking in the short term, and on a small scale. It surely does not make sense to mine asteroids to make some pathetically small increase to consumption of resources on Earth. I believe that 345 tons of platinum are produced annually on Earth; how can asteroid mining possibly make a dent in that? (actually platinum is easy to dent...)

The materials are worth much more if they STAY IN SPACE. I made this point in a recent post; let's look at some numbers.

The cheapest ride nowadays is the Falcon 9. It will put about 8,000 kilograms into low Earth orbit for $59 million. That's $7,300 a kilogram. If you want to go on to geosynchronous orbit, where all the money is made, multiply that by 3 or 4. Let's say $20,000 a kilogram to GEO: that's only about 40% of the spot price of platinum ($54587.485 a kilo recently) but lumps of platinum aren't very useful in orbit. Instead let's compare that to the spot price of ALUMINUM, which is actually useful in space for things like structure: aluminum (99.5% minimum purity, LME spot price, CIF UK ports) is going for about $2000 a metric ton. That means $1 a kilo--so the cost to launch aluminum girders to GEO is 20,000 times greater than the cost of the materials. 

Thus, using off-Earth-mined materials presents a new value proposition: cost avoidance. That was probably obvious; but the case only closes if someone wants to build large things in space ("large" meaning "requires enough material to justify the infrastructure cost of off-Earth mining and processing.")

In 100 years, we should be well along toward colonizing Mars, using large domes to contain breathable atmospheres, enable agriculture, and keep habitable temperatures. The transportation system in the solar system should consist of trips between orbiting fuel depots. At the same time, and using the same technologies, power on Earth and Mars should be produced by completely clean solar energy captured in orbit and beamed to the surface.

All these projects need structural materials. Nothing fancy, just strong enough to hold together in space (maybe a little better than that for the Martian surface). Even sintered dirt might do. In that large-scale vision, off-Earth mining makes complete sense.

So the asteroid miners, Planetary Resources and Deep Space Industries, are making long-term plays. They are trying to capture the market decades in the future. We are so used to thinking only to the next budget cycle or next election that we've forgotten what it means to plan for the truly long term. Or at least The Economist has.