Author Topic: Goldman Sachs Report on Asteroid Mining  (Read 6684 times)

Offline Warren Platts

Goldman Sachs Report on Asteroid Mining
« on: 04/06/2017 02:28 PM »
This story is all over the news this morning: apparently a 98 page report written by Noah Poponak, an aerospace and materials analyst at Goldman, that has a favorable take on the prospects of asteroid mining:

Quote
“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,” the report says.

$2.6 billion (£2 billion) sounds like a lot, but it is only about one-third the amount that has been invested in Uber, putting the price well within reach of today’s VC funds. It is also a comparable to the setup cost for a regular earthbound mine. (This MIT paper estimates a new rare earth metal mine can cost up to $1 billion, from scratch.)

There is just one problem: That same asteroid would instantly tank the entire platinum market: “Successful asteroid mining would likely crater the global price of platinum, with a single 500-meter-wide asteroid containing nearly 175X the global output, according to MIT’s Mission 2016.”

Nonetheless, Goldman is bullish. “We expect that systems could be built for less than that given trends in the cost of manufacturing spacecraft and improvements in technology. Given the capex of mining operations on Earth, we think that financing a space mission is not outside the realm of possibility.”

https://business-insider-uk-yahoopartner.tumblr.com/post/159260933765/goldman-sachs-space-mining-for-platinum-is-more

No mention of lunar mining. I would be VERY interested in reading the original 98 page report, if anyone can find it.

Here is a year old video produced by Mr. Popanak:




« Last Edit: 04/06/2017 02:30 PM by Warren Platts »
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Offline clongton

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #1 on: 04/06/2017 02:37 PM »
There is just one problem: That same asteroid would instantly tank the entire platinum market: “Successful asteroid mining would likely crater the global price of platinum, with a single 500-meter-wide asteroid containing nearly 175X the global output, according to MIT’s Mission 2016.”

Assuming they found a 500 meter-wide asteroid composed almost entirely of platinum. The odds of that are really slim at best.
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Offline Warren Platts

Re: Goldman Sachs Report on Asteroid Mining
« Reply #2 on: 04/06/2017 03:03 PM »
There is just one problem: That same asteroid would instantly tank the entire platinum market: “Successful asteroid mining would likely crater the global price of platinum, with a single 500-meter-wide asteroid containing nearly 175X the global output, according to MIT’s Mission 2016.”

Assuming they found a 500 meter-wide asteroid composed almost entirely of platinum. The odds of that are really slim at best.

A 500 meter sphere of platinum would mass 1.4 billion tonnes. Since global production of Pt is about 130 mT, that's 10,000,000X the global output.

175 X 130 =  22,750 mT of Pt. Assuming a density of 8,000 kg/m^3 then that implies a Pt concentration of about 43 ppm, which is definitely on the high side (normal concentrations are on the order of a ppm), but not out of the realm of possibility perhaps.

But even so, such an asteroid would crash the market. 130 tonnes of Pt is about 6% of the total global production of gold. Thus, if you wanted to make a killing in space mining, gold would be the target IMHO. YMMV.
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Offline Tuts36

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #3 on: 04/06/2017 03:17 PM »
Quote
But even so, such an asteroid would crash the market. 130 tonnes of Pt is about 6% of the total global production of gold. Thus, if you wanted to make a killing in space mining, gold would be the target IMHO. YMMV.

Depends.  The current players in platinum production would definitely not want to crash the market.  I wouldn't hold my breath looking for them to branch into asteroid mining unless they are forced into it to stay relevant.

However, a non-mining corporation that would benefit from large quantities of bargain-basement platinum might be willing to invest in this, if new space manages to lower launch costs far enough to make the gamble enticing.

Online Kansan52

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #4 on: 04/06/2017 03:33 PM »
Tomorrow's announcement, Discovery Channel's new reality TV show, "Gold Rush - Space".

Offline Tuts36

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #5 on: 04/06/2017 03:42 PM »
Tomorrow's announcement, Discovery Channel's new reality TV show, "Gold Rush - Space".

I would watch that!

Offline Warren Platts

Re: Goldman Sachs Report on Asteroid Mining
« Reply #6 on: 04/06/2017 03:48 PM »
Quote
But even so, such an asteroid would crash the market. 130 tonnes of Pt is about 6% of the total global production of gold. Thus, if you wanted to make a killing in space mining, gold would be the target IMHO. YMMV.

Depends.  The current players in platinum production would definitely not want to crash the market.  I wouldn't hold my breath looking for them to branch into asteroid mining unless they are forced into it to stay relevant.

However, a non-mining corporation that would benefit from large quantities of bargain-basement platinum might be willing to invest in this, if new space manages to lower launch costs far enough to make the gamble enticing.

What they could do is use predatory pricing to crash the price of Pt on Earth, and put all producers completely out of business. Once that was done, they would have monopoly pricing power, and could then set the price forever at just below the marginal cost of the most productive platinum mine on Earth.

I've been trying to get a quantitative handle on the Pt demand curve. In 2014 there was a big strike that took about 20% of the 6 mo. supply out of the market, and there was a correlated price rise of about 10%. So if they wanted to crash the price by half, they'd have to quadruple the world's supply. Assuming they could capture the entire market at this point, it would be worth $15K/kg x 4 x 130,000 kg = $7.8B/year. Is that enough to run a major space program? Maybe. But it's hard to see how you're going to generate the world's first trillionaire with that revenue level. For comparison Exxon pulls in about $200B/year (down by half from a few years ago).
« Last Edit: 04/06/2017 03:49 PM by Warren Platts »
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Offline RonM

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #7 on: 04/06/2017 03:55 PM »
Once the asteroid is in orbit, the platinum still needs to be extracted. That's not going to be an easy task and would be expensive. Impact on the market should be the same as discovering a new mine. Once production ramps up the commodity price could go down. Whoever is doing the asteroid processing can limit production to prevent a market crash.

Offline Tuts36

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #8 on: 04/06/2017 03:56 PM »
Quote
But even so, such an asteroid would crash the market. 130 tonnes of Pt is about 6% of the total global production of gold. Thus, if you wanted to make a killing in space mining, gold would be the target IMHO. YMMV.

Depends.  The current players in platinum production would definitely not want to crash the market.  I wouldn't hold my breath looking for them to branch into asteroid mining unless they are forced into it to stay relevant.

However, a non-mining corporation that would benefit from large quantities of bargain-basement platinum might be willing to invest in this, if new space manages to lower launch costs far enough to make the gamble enticing.

What they could do is use predatory pricing to crash the price of Pt on Earth, and put all producers completely out of business. Once that was done, they would have monopoly pricing power, and could then set the price forever at just below the marginal cost of the most productive platinum mine on Earth.

I've been trying to get a quantitative handle on the Pt demand curve. In 2014 there was a big strike that took about 20% of the 6 mo. supply out of the market, and there was a correlated price rise of about 10%. So if they wanted to crash the price by half, they'd have to quadruple the world's supply. Assuming they could capture the entire market at this point, it would be worth $15K/kg x 4 x 130,000 kg = $7.8B/year. Is that enough to run a major space program? Maybe. But it's hard to see how you're going to generate the world's first trillionaire with that revenue level. For comparison Exxon pulls in about $200B/year (down by half from a few years ago).

The first effort to capture a Pt heavy asteroid for mining purposes would get heavy press coverage, and it would all happen in slow motion.  That's the point where everyone else would scramble to do the same before your monopoly scenario could play out.  Would they be able to move quickly enough?  I don't know, but it'd be entertaining to find out  ::)

Offline MikeAtkinson

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #9 on: 04/06/2017 03:59 PM »
The trick will be to turn greater platinum production into a better product (worth 10x as much) and then leverage that better product in a service (worth 100x as much).

This is what SpaceX are trying to do with their LEO and vLEO constellations, start with a relatively small advantage in launch, use that to enable better/cheaper LEO satellites, then use those to provide communications services worth much, much more. [would not be surprise if SpaceX offered end user services as well bringing in even more revenue).

Given how useful the platinum group metals are, there are numerous potential avenues to exploit in this way.

What they could do is use predatory pricing to crash the price of Pt on Earth, and put all producers completely out of business. Once that was done, they would have monopoly pricing power, and could then set the price forever at just below the marginal cost of the most productive platinum mine on Earth.

If they did this, then they may be able to leverage their monopoly in platinum into becoming a major chemical manufacturer, which might then be leveraged into finished products using those chemicals. [as just one example]

Offline Archibald

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #10 on: 04/06/2017 04:32 PM »
If goldman Sachs show interest in asteroid mining, then it might be a sign the market is ready to provide a crapload of benefits (to their pocket)

http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405

Offline Lar

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #11 on: 04/06/2017 04:45 PM »
Unless you have space fighters to shoot down rival asteroid miners... (let's not go there)  you can't get monopoly pricing for long. I can see a space based mining cartel forming ala OPEC (MAYBE, but I doubt it) but not a single producer holding pricing power.

I just like that people are starting to think through "what if launch prices DID come down, what if Jeff and Elon aren't just crazy billionaires ranting.... but crazy billionaires that are going to make prices come down... what then? How can we benefit?"
« Last Edit: 04/06/2017 04:45 PM by Lar »
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Offline Rocket Science

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #12 on: 04/06/2017 05:26 PM »
Goldman Sachs, my favorite people... :-X
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Offline john smith 19

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #13 on: 04/06/2017 05:41 PM »
but crazy billionaires that are going to make prices come down... what then? How can we benefit?"
And by "we" understand that's Goldman Sachs.

Not necessarily their customers.  :(
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Offline Lar

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #14 on: 04/06/2017 05:42 PM »
OK that's two posts in a row hating on GS. Point taken I think?

How many other mainstream outfits would need to say similar things before conventional wisdom shifts?
« Last Edit: 04/06/2017 05:43 PM by Lar »
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Offline incoming

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #15 on: 04/06/2017 05:48 PM »

What they could do is use predatory pricing to crash the price of Pt on Earth, and put all producers completely out of business. Once that was done, they would have monopoly pricing power, and could then set the price forever at just below the marginal cost of the most productive platinum mine on Earth.


A quick internet search puts the average cost of platinum production on the order of $1200-1600/oz.  Ultimately, that's the number to beat for space-based platinum mining, assuming the point is to bring it back to Earth (hopefully one day we'll need a constant supply of platinum in space along with other raw materials). So the real question is, can a company profitably return platinum to Earth at a rate low enough to keep from crashing the market but high enough to have sufficient economies of scale to beat the terrestrial production cost.

That raises an interesting thought on the demand side of the equation.  Platinum and Gold exist in similar quantities and concentrations terrestrially, and platinum is about 20% more expensive to produce than gold.  Yet over 10 times as much gold is produced annually than platinum. (One might speculate that the cost of platinum production might even come down to match gold if the production rate was higher.) 

Looking to future demand, one of the largest consumers of platinum is the auto industry for cat beds, how likely is a shift in the coming decades away from internal combustion powered autos, vs. growing demand in the developing world for internal combustion powered autos? 

Understanding the demand side of the equation could go a long way to determining the threshold amount for "crashing" the market.     

Online TrevorMonty

Re: Goldman Sachs Report on Asteroid Mining
« Reply #16 on: 04/06/2017 05:58 PM »
If Warren theory about gold deposits in polar craters is correct, it could be viable along with propellant production from lunar ice. At $40m ton it could be worth while especially as water for fuel to transport gold to LEO would as be extracted at same time.

Offline john smith 19

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #17 on: 04/06/2017 06:39 PM »

A quick internet search puts the average cost of platinum production on the order of $1200-1600/oz.  Ultimately, that's the number to beat for space-based platinum mining, assuming the point is to bring it back to Earth
So that's a minimum of $19200/ lb. Well lowering the launch costs below that should definitely be possible.
Building a mining and return system (especially one that does not literally burn up every time) is more difficult.
Quote from: incoming
Looking to future demand, one of the largest consumers of platinum is the auto industry for cat beds, how likely is a shift in the coming decades away from internal combustion powered autos, vs. growing demand in the developing world for internal combustion powered autos? 

Understanding the demand side of the equation could go a long way to determining the threshold amount for "crashing" the market.   
Indeed.

Just a wild notion but in the long run maybe a large Lithium deposit will prove more profitable?
There's also the ability to harvest sunlight relatively easily for on orbit smelting and concentration.
"Solids are a branch of fireworks, not rocketry. :-) :-) ", Henry Spencer 1/28/11  Averse to bold? You must be in marketing."It's all in the sequencing" K. Mattingly.  STS-Keeping most of the stakeholders happy most of the time.

Offline floss

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #18 on: 04/06/2017 08:03 PM »
Platinium is far from the most valuable material that can be mined in space Iridium is worth far more to terrestrial civilisation because you can use iridium to create artificial photosynthesis and remove atmospheric  CO2 from the atmosphere and turn it into fuel .

How would anyone like a panel on their roof that makes fuel that they can put in their car or heat their house for free ?

Offline Warren Platts

Re: Goldman Sachs Report on Asteroid Mining
« Reply #19 on: 04/06/2017 08:13 PM »
Understanding the demand side of the equation could go a long way to determining the threshold amount for "crashing" the market.

Yes, the demand curve will be key. I did some fooling around with the (linear) demand curve seemingly implied by the 2014 Pt strike (where a 20% reduction in supply caused an apparent 10% spike in prices), and I get a formula of:

P = -0.115384615 * Q + 45,000

where P is the price in $/kg, and Q is total annual production in kilograms per year. (For present prices I'm assuming $30K/kg and 130,000 kg of produced Pt.)

I got some interesting results: once production causes the price to decline below $22.5K/kg (25% less than current prices), total revenue starts going down. So the optimal price point is $22.5K/kg, with a total production of 195 mT, and total revenue of $4.4B, compared to total revenues today of approximately $3.9B.

Thus, to do the predatory pricing strategy, assuming a 50% price reduction would do the trick, they would have to double the total production, and their revenues at that point would still be $3.9B.

As for the benefit to society, at the optimal point, the consumer surplus per year would be about $1.2B (that is, money freed up that can be spent on other things). If they kept the price at $15K/kg (50% of today's price), then the consumer surplus would be nearly $3B/year.



"When once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you have been, and there you will always long to return."--Leonardo Da Vinci

Offline Warren Platts

Re: Goldman Sachs Report on Asteroid Mining
« Reply #20 on: 04/06/2017 08:21 PM »
Platinium is far from the most valuable material that can be mined in space Iridium is worth far more to terrestrial civilisation because you can use iridium to create artificial photosynthesis and remove atmospheric  CO2 from the atmosphere and turn it into fuel .

How would anyone like a panel on their roof that makes fuel that they can put in their car or heat their house for free ?

{citation needed}
"When once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you have been, and there you will always long to return."--Leonardo Da Vinci

Offline RotoSequence

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #21 on: 04/06/2017 08:39 PM »
Well, if this chart is accurate, there's plenty of other resource opportunities in space mining. The distribution of elements in the universe is full of surprises.

Offline Warren Platts

Re: Goldman Sachs Report on Asteroid Mining
« Reply #22 on: 04/06/2017 09:12 PM »
Actually, there is reason to believe the costs of production could be radically lower. The cost of "mining" the asteroid is really mainly the cost of moving the object to Earth orbit. Once there, since it's mostly metal, slabs of the asteroid could be fed directly into an electric arc blast furnace. This is A LOT easier than trying to beneficiate ore.

The thing is, the "slag" that would result is basically nature's own Inconel steel, which is the best steel known to mankind. You could then use this to manufacture satellites and other structures for use in space. The deadweight value of these items would be equal to the cost it would take to launch the same mass from Earth's surface. Basically, the value of the steel would be the per kg launch costs.

Thus enough steel to build a structure with twice the mass of the ISS (~500 mT), and if launch costs are $10K/kg, then the value added would be worth ~$10B right there. If Pt is at 100 ppm concentration (which is extremely high), after producing 1,000 tonnes of steel, you'd have a paltry 0.1 tonnes of Pt.

Flipping that around, if you produced the optimal amount of Pt (~200 mT sold for $4.5B), the excess steel would be 2 million tonnes--enough to build 4,000 ISS's. At 10K/kg, that's worth $20 trillion; that is equal to the US GDP.

Bottom Line: it's quite clear that platinum is wagging the dog when it comes to mining iron asteroids.
« Last Edit: 04/06/2017 09:13 PM by Warren Platts »
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Offline allhumanbeings07

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #23 on: 04/07/2017 12:16 AM »
Platinium is far from the most valuable material that can be mined in space Iridium is worth far more to terrestrial civilisation because you can use iridium to create artificial photosynthesis and remove atmospheric  CO2 from the atmosphere and turn it into fuel .

How would anyone like a panel on their roof that makes fuel that they can put in their car or heat their house for free ?

{citation needed}

Well, we have solar panels and electric cars already, no asteroids required
I love Star Trek more than anyone, but we don't (and shouldn't) spend tens of billions of dollars on space programs for fun

Online Robotbeat

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #24 on: 04/07/2017 01:10 AM »
Understanding the demand side of the equation could go a long way to determining the threshold amount for "crashing" the market.

Yes, the demand curve will be key. I did some fooling around with the (linear) demand curve seemingly implied by the 2014 Pt strike (where a 20% reduction in supply caused an apparent 10% spike in prices), and I get a formula of:

P = -0.115384615 * Q + 45,000

where P is the price in $/kg, and Q is total annual production in kilograms per year. (For present prices I'm assuming $30K/kg and 130,000 kg of produced Pt.)

I got some interesting results: once production causes the price to decline below $22.5K/kg (25% less than current prices), total revenue starts going down. So the optimal price point is $22.5K/kg, with a total production of 195 mT, and total revenue of $4.4B, compared to total revenues today of approximately $3.9B.

Thus, to do the predatory pricing strategy, assuming a 50% price reduction would do the trick, they would have to double the total production, and their revenues at that point would still be $3.9B.

As for the benefit to society, at the optimal point, the consumer surplus per year would be about $1.2B (that is, money freed up that can be spent on other things). If they kept the price at $15K/kg (50% of today's price), then the consumer surplus would be nearly $3B/year.


I like your analysis. Really drives home the point that the market even for all of the platinum group metals is pretty small. Smaller than Intelsat and SES's revenue combined, even assuming you saturate the market. Even so, it's a big enough market to be interesting if you can somehow get the costs low enough. But it's not going to dramatically expand the space economy.
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Offline savuporo

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #25 on: 04/07/2017 03:20 AM »
Demand for $1 per gram of platinum doesn't look like that, at all
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Online A_M_Swallow

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #26 on: 04/07/2017 09:05 AM »
Heat shields for ore can be very different than those of people. It does not matter if the shield melts providing it does not burn off. Vacuum can be used as an insulator.

Offline Warren Platts

Re: Goldman Sachs Report on Asteroid Mining
« Reply #27 on: 04/07/2017 04:59 PM »
Demand for $1 per gram of platinum doesn't look like that, at all.

OK, fine. Let's assume brand new uses of platinum can be found if the price drops low enough. If the entire 500 m asteroid was processed in a year, that's comparable to the annual earthly production of silver, which is currently about $586/kg, so the price of Pt at that point is going to be comparable. I suspect that since Pt is harder to worker with (due to it's much higher melting point), it would be worth a little less than silver. So let's just call it $0.50 per gram when production get's to 22,750 mT/yr (the 175X the current production mentioned in the article).

So that gives us our three points from which to calculate a curve:

(Q, P)
(104, 33)
(130, 30)
(22750, 0.5)

I found this calculator for constructing a curve of the form y = (ax + c)/(x - b) that has the general shape you're looking for. It matches the 3 points to within tiny fractions of a percent.

http://www.had2know.com/academics/rational-function-regression-calculator.html

On this curve, revenue always keeps increasing no matter how much you produce, but you run into heavy diminishing returns. Processing the entire asteroid (i.e., increasing production by a factor of 175) increases revenue to $11B--an increase by a factor of less than 3. Another doubling of production to 50,000 mT/year only brings in a total of $15B/year.

Now, $11B is certainly a lot of money to you or me, but it's about 0.05% of the US economy. There's no way the next trillionaire is going to come from a platinum titan.

On the other hand, after you're done processing your 22,750 mT of Pt, you've now got $20 trillion worth of Inconel steel waste you've got to throw away....  :-X

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Offline savuporo

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #28 on: 04/07/2017 07:03 PM »
I found this calculator for constructing a curve of the form y = (ax + c)/(x - b) that has the general shape you're looking for. It matches the 3 points to within tiny fractions of a percent.

http://www.had2know.com/academics/rational-function-regression-calculator.html

WolframAlpha does that pretty well too, btw
http://www.wolframalpha.com/input/?i=logarithmic+fit+%7B104,+33%7D,+%7B130,+30%7D,+%7B22750,+0.5%7D

Or if you want widget: http://www.wolframalpha.com/widgets/view.jsp?id=a96a9e81ac4bbb54f8002bb61b8d3472
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Offline DanielW

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #29 on: 04/07/2017 07:31 PM »
I think predictions of asteroid mining crashing markets are a bit premature. Once you capture that amazing shiny rock, you still need to process it and transport it. None of that is going to be free or fast.

If prices do indeed fall significantly that open the possibility of using what were exotic materials for more mundane things. The final market could be larger.

Offline Warren Platts

Re: Goldman Sachs Report on Asteroid Mining
« Reply #30 on: 04/08/2017 08:49 AM »
I found this calculator for constructing a curve of the form y = (ax + c)/(x - b) that has the general shape you're looking for. It matches the 3 points to within tiny fractions of a percent.

http://www.had2know.com/academics/rational-function-regression-calculator.html

WolframAlpha does that pretty well too, btw
http://www.wolframalpha.com/input/?i=logarithmic+fit+%7B104,+33%7D,+%7B130,+30%7D,+%7B22750,+0.5%7D

Or if you want widget: http://www.wolframalpha.com/widgets/view.jsp?id=a96a9e81ac4bbb54f8002bb61b8d3472

Interesting, but the logarithmic plot doesn't capture the features we want very well. First of all, it goes to zero soon after 22,750 mT (24,618 mT to be exact), so it doesn't truly capture the idea that new uses will enter the game at cheap prices. (An artifact of any demand curve that goes to zero revenue levels is, apparently, there will be an optimal price point: 9,000 mT @ $2.57/gram $5.92 in this example generating $23B$53B/year.)

Also, it's not very accurate at the left end, if I entered the formula correctly: =-5.8854*LOGLN(0.0000406214*V12)

The three points for the log graph are reproduced as {104, 13.97}, {130, 13.40}, {22750, 0.2}
{104, 32.17}, {130, 30.86}, {22750, 0.46} compared to
{104, 33.00002}, {130, 30.00002}, {22750, 0.50004} for the rational function regression.
« Last Edit: 04/09/2017 02:27 PM by Warren Platts »
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Offline Oli

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #31 on: 04/08/2017 04:38 PM »

I've been searching for "MIT’s Mission 2016", which the article refers to.

I only found this site, which itself refers to websites which themselves refer to 2012 studies by planetary resources and NASA on the asteroid retrieval mission (among others).

http://web.mit.edu/12.000/www/m2016/finalwebsite/solutions/asteroids.html

A lot of hot air if you ask me.

Offline Warren Platts

Re: Goldman Sachs Report on Asteroid Mining
« Reply #32 on: 04/09/2017 06:46 PM »
A lot of hot air if you ask me.

It is. Also, one must question the wisdom of a 98 page report on space mining (I still can't locate a copy--if anyone can, please post it here) that does not compare and contrast lunar mining with asteroid mining. It's not at all clear which activity would have the comparative advantage in the "short run" at least.

However, the presence of a 500 m metallic asteroid in Earth orbit (I'd put in one of the Trojan Lagrange points in order to minimize orbital debris issues) remains an intriguing concept from a scifi viewpoint if nothing else.

The thing is, the Pt contained within the asteroid is small potatoes. The main thing is you've got 524 million tonnes (assuming a 500 m sphere, density 8,000 kg/m^3) of good nickel ore. It is an exaggeration to say an iron meteorite is "Nature's Inconel"--since Inconel is mostly made of nickel, not iron, whereas iron is the dominant constituent of an iron meteorite. Thus, if the prospectors did their job properly, they would try to find an asteroid with a high nickel content, which can get up to 25%. At current prices, that' would  be worth $1.3 trillion. Of course there's still the problem of dumping: 131 million tonnes of Ni exceeds the current production of 2 million tonnes by a factor of 65. Less bad than the 175X that the Pt would entail, but would have a big effect.

That leaves the iron. Scrap steel goes for around 10 cents a kilogram. Meanwhile, total steel production is like 1.6 billion tonnes, compared to the mass of the asteroid of 524 million tonnes. That's going to have a big effect on the market, but at least it won't swamp it by multiple factors. Assuming you could get $0.10/kg, (I figure the Ni would be worth at least that), total value would be $52.4 billion. NOW, we're finally talking some turkey--albeit, still not quite in the Exxon ballpark. The benefit to society would be huge as well, as it would crash the price of Inconel, and make it an everyday material, causing a huge consumer surplus for that product.

« Last Edit: 04/09/2017 06:48 PM by Warren Platts »
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Offline Paul451

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #33 on: 04/10/2017 03:39 AM »
I think predictions of asteroid mining crashing markets are a bit premature. Once you capture that amazing shiny rock, you still need to process it and transport it. None of that is going to be free or fast.

The issue isn't that mining PGMs from asteroids is cheap, it's whether the total annual demand for extra platinum is sufficient to pay for the minimum cost of mining the asteroid.

At some rate of production, you are causing the market price to drop below your production costs. Resulting in zero profit. If you do nothing, you also make zero profit. Somewhere in between is the maximum profit, at a specific rate of production.

If the global market is too small, that maximum profit is below the ROI necessary to attract enough investment to pay for the initial development & infrastructure costs.
« Last Edit: 04/10/2017 03:40 AM by Paul451 »

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #34 on: 04/11/2017 08:47 PM »
Actually, there is reason to believe the costs of production could be radically lower. The cost of "mining" the asteroid is really mainly the cost of moving the object to Earth orbit. Once there, since it's mostly metal, slabs of the asteroid could be fed directly into an electric arc blast furnace. This is A LOT easier than trying to beneficiate ore.

The thing is, the "slag" that would result is basically nature's own Inconel steel, which is the best steel known to mankind. You could then use this to manufacture satellites and other structures for use in space. The deadweight value of these items would be equal to the cost it would take to launch the same mass from Earth's surface. Basically, the value of the steel would be the per kg launch costs.

Thus enough steel to build a structure with twice the mass of the ISS (~500 mT), and if launch costs are $10K/kg, then the value added would be worth ~$10B right there. If Pt is at 100 ppm concentration (which is extremely high), after producing 1,000 tonnes of steel, you'd have a paltry 0.1 tonnes of Pt.

Flipping that around, if you produced the optimal amount of Pt (~200 mT sold for $4.5B), the excess steel would be 2 million tonnes--enough to build 4,000 ISS's. At 10K/kg, that's worth $20 trillion; that is equal to the US GDP.

Bottom Line: it's quite clear that platinum is wagging the dog when it comes to mining iron asteroids.

I think there's another point embedded here that always seems to materialize whenever I look at these types of analyses - space resources can absolutely be viable economically...as long as you are planning to use them in space.  I've just never seen a compelling business case where bringing large amounts of space resources down to Earth makes much sense without large "and then a miracle happens" speculative leaps.

Which is interesting, because harvesting space resources is often cited as a rationale for increased activity in space (most often, in support of a moon base).  See the circular logic?   

Offline savuporo

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #35 on: 04/12/2017 05:52 AM »
.. I've just never seen a compelling business case where bringing large amounts of space resources down to Earth makes much sense ... 

PGMs have have only a few geographical locations on earth with substantial viable resources. What if access to some of those is suddenly destabilized ?
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Offline Paul451

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #36 on: 04/12/2017 08:16 AM »
I think there's another point embedded here that always seems to materialize whenever I look at these types of analyses - space resources can absolutely be viable economically...as long as you are planning to use them in space.  I've just never seen a compelling business case where bringing large amounts of space resources down to Earth makes much sense without large "and then a miracle happens" speculative leaps.

While I generally agree, and I prefer to focus on volatiles for use in space, PGMs are valuable enough that they are on the cusp of viable.

Which is interesting, because harvesting space resources is often cited as a rationale for increased activity in space (most often, in support of a moon base).  See the circular logic?

It's not circular. If you have an industry that extracts resources for use in space (such as fuel), you lower the price for other activities (such as PGM mining). If you have a market for asteroid-mined PGMs, then you have the basic infrastructure necessary to extract other resources for use in space. It doesn't matter which comes first, it one is viable, it makes the other more viable. Once regular mining is established, the "waste" from one process becomes cheap enough that you might as well bring it back to Earth (such as nickel), even though it would never have justified the creation of the necessary infrastructure on its own. Likewise, bulk materials left over from other processing may end up cheap enough that they can substitute for bulk material (aluminium tanks, shielding, trusses, etc) that would otherwise be brought from Earth.

It's about self-reinforcing development. Not a circle, but a spiral.

Offline mikelepage

Re: Goldman Sachs Report on Asteroid Mining
« Reply #37 on: 04/12/2017 09:02 AM »
Doesn't the idea that extra Platinum will crash the market assume that there won't be new uses for Platinum once the price drops?

I've heard Aluminium used as a analogy for something that was once expensive and rare.

Platinum, Palladium, Iridium are all metals that would be really useful in wider applications if they were less expensive and less rare.

Offline Paul451

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #38 on: 04/12/2017 10:46 AM »
Doesn't the idea that extra Platinum will crash the market assume that there won't be new uses for Platinum once the price drops?
I've heard Aluminium used as a analogy for something that was once expensive and rare.
Platinum, Palladium, Iridium are all metals that would be really useful in wider applications if they were less expensive and less rare.

Sure, but it takes time. And you don't know, in advance, what the market demand and demand/price curve will look like. Which means you can't play with mine production rates vs infrastructure and operations costs, to see if your business case closes.

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #39 on: 04/12/2017 01:25 PM »
I think there's another point embedded here that always seems to materialize whenever I look at these types of analyses - space resources can absolutely be viable economically...as long as you are planning to use them in space.  I've just never seen a compelling business case where bringing large amounts of space resources down to Earth makes much sense without large "and then a miracle happens" speculative leaps.

While I generally agree, and I prefer to focus on volatiles for use in space, PGMs are valuable enough that they are on the cusp of viable.

Which is interesting, because harvesting space resources is often cited as a rationale for increased activity in space (most often, in support of a moon base).  See the circular logic?

It's not circular. If you have an industry that extracts resources for use in space (such as fuel), you lower the price for other activities (such as PGM mining). If you have a market for asteroid-mined PGMs, then you have the basic infrastructure necessary to extract other resources for use in space. It doesn't matter which comes first, it one is viable, it makes the other more viable. Once regular mining is established, the "waste" from one process becomes cheap enough that you might as well bring it back to Earth (such as nickel), even though it would never have justified the creation of the necessary infrastructure on its own. Likewise, bulk materials left over from other processing may end up cheap enough that they can substitute for bulk material (aluminium tanks, shielding, trusses, etc) that would otherwise be brought from Earth.

It's about self-reinforcing development. Not a circle, but a spiral.

I agree that once you are out there going for volatiles it's perhaps marginally less to go for metals as well, and vice-versa.  I do not agree that it's ever trivial to bring back large amounts of very heavy, dense material to Earth.  The ISS program is an example, albeit an imperfect one.  But from time to time cargo downmass can be just as big of an issue for them as cargo upmass.  Granted returning raw material that isn't sensitive to g-loads and far less sensitive to other natural and induced environmental factors isn't the same as returning lab samples or hardware for repair. But it still requires a lot of delta V that you have to produce somehow, and unless we're willing to pick a country to rain asteroids down on and then go collect our bounty it has to be done gracefully. And when people on this thread are talking about doing that for hundreds of thousands of tons of metal, that is not at all trivial. 

Finally - I'm not sure how your argument refutes my point that resource extraction is not a compelling rationale for exploration of  space, at least given the current economics surrounding PGMs.  It's certainly an enabling technology for exploration, and there may come a day when, if we're out there anyway for a different reason or set of reasons, it starts to make sense to bring stuff back. But I think that day is a long time and several technological generations in the future, and I stand by my point that any argument that we should explore space in order to bring back resources is illogical given the current and foreseeable term economics.  I would love to be convinced otherwise, but not if it requires "the willing suspension of disbelief."

   

Offline as58

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #40 on: 04/12/2017 07:15 PM »
I don't know if it's from the Goldman Sachs paper or just written for the Business Insider article, but that comparison of $2.6B (IMO optimistic) cost estimate for a 500-ton asteroid capture and $1B set-up cost of a new mine on Earth isn't exactly apples-to-apples.

Offline Paul451

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #41 on: 04/12/2017 11:27 PM »
[edit: 2/3rds of this is probably strictly off-topic. But the post is hopefully long enough to confuse the mods.]

I agree that once you are out there going for volatiles it's perhaps marginally less to go for metals as well, and vice-versa. I do not agree that it's ever trivial to bring back large amounts of very heavy, dense material to Earth.

Not trivial, it just has to be profitable. Do that, and the process should ratchet, each step justifying investment in infrastructure and capacity that lowers the price of the next step.

Re: ISS. The material being bought back is prepared scientific samples. It needs to be protected, in some cases even refrigerated. It necessitates a re-entry capsule.

If there is large scale mining of high-value items, such as PGMs -- if that business case ever closes -- then subsequent efforts to lower costs may be to shape the metal into a direct re-entry capable shape and coat it with slag from the mining as a heat-shield. (The PGMs "lithobrake", but at a reasonable terminal velocity to allow simple recovery of the metal.) Once that capacity exists, then the same method may also work on larger amounts of lower value metal like nickel.

Not having a parachute or other gentle recovery doesn't mean "asteroid impact", it's not binary. Recovery systems on capsules only cover the final few hundred km/h, the bulk of braking comes from the re-entry shape. A bubble of metal covered with an ablative heat-shield can reduce that terminal velocity to any arbitrary level. Trades will come from impact speed (risks plus recovery costs) vs processing costs to produce and coat the bubble.

And when people on this thread are talking about doing that for hundreds of thousands of tons of metal, that is not at all trivial.

Iron is cheap. So obviously it will be a long time before metallic iron from space is cheaper than mining and processing iron ore on Earth.

IMO, decades before it would ever compete with prices on Earth, there'll be earlier steps where it's cheaper to use asteroidal iron (and aluminium, etc) in "export replacement" for in-space uses. The point where it is cheaper than Earth-mining will spin-off from the existing in-situ use. (Ie, at some point, someone might be able to argue, "Cost of expanding production to meet projections of next 30yrs in-space use is $X billion, giving a unit price of $n/tonne. However, the cost of tripling the production rate is much less than $3X billion, giving a unit price much less than $n/tonne, that not only undercuts our rivals for in-space markets, increasing both revenues and profit margin per unit, but it even brings us within range of Earth prices...")

Finally - I'm not sure how your argument refutes my point that resource extraction is not a compelling rationale for exploration of space, at least given the current economics surrounding PGMs.  It's certainly an enabling technology for exploration, and there may come a day when, if we're out there anyway for a different reason or set of reasons, it starts to make sense to bring stuff back.

It's the self-reinforcing aspect.

We clearly want to explore space. We spend a small fortune on it each year. Yet the cost of access and operations puts hard limits on what we can do. Demonstrated by the fact that multi-billion dollar space-rated (hence dumb, slow, limited) robotic systems are cheaper than sending an underpaid grad student with a trowel. Anything that significantly lowers the cost of accessing space will increase the number of people who can do the things they want. Anything that significantly lowers the cost of operating humans in space will increase the number of people who can do things they want personally, on site.

And once you get to that level, it's obvious that people will do foolish and wasteful things, like tourism or even colonies, expanding the demand for volatiles (fuel, air, water), shielding, habitats, even food. That creates potential business cases for new industries, creating yet more activity...

Flipping it around. If lowering the price of access to space brings the cost of PGMs within range of Earth prices, at production rates that don't crash the price too hard, then the infrastructure that is created to do so can be used for other things. (By "infrastructure", I'm including transport systems to/from the asteroid & Earth.) And the mining operation itself becomes a market for other materials (such as fuel), which may help close the business case for volatile mining. Creating routine reusable transport to/from Earth means that you lower the price for many other activities in space (even if mostly unmanned). And lowering the price of fuel (hence the price of delta-v), lowers the cost of even manned activities in space. Which increases the market for other materials and products in space, which....

It doesn't matter what the entry point is, once we're in, we're in.



My personal opinion is that the case for PGMs doesn't close yet, even if New-Space lowers the launch prices. Cheap in-situ fuel must come first. The neat thing about that is that I strongly believe the ices trapped at the lunar poles will be extremely scientifically valuable. So confirming the existence and studying the nature of that polar ice is of existing scientific value, without any regard for future commercial markets. You don't need to commercially justify a survey of lunar polar ice, it's just a scientific mission. (Likewise studying remnant comets in the inner solar system, to see if they are "dry" or just an insulating layer of carbon-materials over mixed ices. Any answer is scientifically valuable, and one specific answer might be commercially valuable in the future.)

But if someone actually can make money from mining PGMs, it simply makes volatile mining more viable, giving the volatile-miner a guaranteed anchor client. So I'm hardly going to be disappointed if PGM-advocates are right.



[Aside: Some people argue that if you lower the price of launch, you undermine the market for in-space fuel. However, IMO, by lowering the price of launch significantly, you expand the range of activities in space enough to increase the overall demand for in-situ fuel (and air/water). Look at SpaceX's Mars plans. Even ITS doesn't work if they had to bring their return fuel with them. A fully fuelled ITS-BFS in LEO is just capable of landing on the Moon and returning to Earth on a single tank; but it's vastly more capable if it lands on the Moon, refuels, then returns to Earth. It's even more capable if an ITS-tanker operating on the Moon is ferrying fuel to L1.]

[edit: some typos and ambiguous grammar]
« Last Edit: 04/25/2017 03:20 AM by Paul451 »

Offline Warren Platts

Re: Goldman Sachs Report on Asteroid Mining
« Reply #42 on: 04/24/2017 01:28 PM »
Interesting related article from Bloomberg:

https://www.bloomberg.com/news/articles/2017-04-23/space-the-final-frontier-seen-for-earth-s-crude-oil-giants

Quote
water accumulated in space would become valuable as it could be used for rocket fuel for interstellar voyages. The substance is too heavy and costly to transport from Earth.  ;D

Re: lithobraking, I think Jon Goff once proposed constructing hollow platinum spheres that might be able to survive reentry. Actually, since the sphere would be made in a pure vacuum, if it was thin enough, and big enough, it would have neutral buoyancy in air.  The diameter d of such a sphere with a thickness t can be given by:

d = 6 * t * Pt_density/Air_density

Thus, if I did it right, 195 mT in one sphere, if it was 0.64 mm thick walls, would have a diameter of 67.24 meters and have neutral bouyancy, assuming the atmospheric pressure didn't crush it.
« Last Edit: 04/24/2017 01:29 PM by Warren Platts »
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Online envy887

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #43 on: 04/24/2017 01:34 PM »
Interesting related article from Bloomberg:

https://www.bloomberg.com/news/articles/2017-04-23/space-the-final-frontier-seen-for-earth-s-crude-oil-giants

Quote
water accumulated in space would become valuable as it could be used for rocket fuel for interstellar voyages. The substance is too heavy and costly to transport from Earth.  ;D

Re: lithobraking, I think Jon Goff once proposed constructing hollow platinum spheres that might be able to survive reentry. Actually, since the sphere would be made in a pure vacuum, if it was thin enough, and big enough, it would have neutral buoyancy in air.  The diameter d of such a sphere with a thickness t can be given by:

d = 6 * t * Pt_density/Air_density

Thus, if I did it right, 195 mT in one sphere, if it was 0.64 mm thick walls, would have a diameter of 67.24 meters and have neutral bouyancy, assuming the atmospheric pressure didn't crush it.

Evacuated spheres light enough to float in air will always buckle under atmospheric pressure on Earth, for any known material.

However, extremely thin sheets or foils might both survive reentry and land mostly intact at a very low terminal velocity due to an extremely high ratio of surface area per unit mass.

Offline Paul451

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #44 on: 04/25/2017 09:07 AM »
d = 6 * t * Pt_density/Air_density
Thus, if I did it right, 195 mT in one sphere, if it was 0.64 mm thick walls, would have a diameter of 67.24 meters and have neutral bouyancy, assuming the atmospheric pressure didn't crush it.

You used sea-level air density, which exerts 10 tonnes/m³ of pressure. 0.64mm of any substance won't sustain 10t/m³ without crushing.

However, re: lithobraking. You don't need to have any kind of gentle descent. As long as it is subsonic by the time it hits the chosen landing zone, the metal will be easily recoverable. You'll be aiming for a desert, of course, but recovery is simple.

Offline Warren Platts

Re: Goldman Sachs Report on Asteroid Mining
« Reply #45 on: 04/25/2017 01:13 PM »
I found a pressure vessel calculator. 0.64 mm would work for a vacuum chamber about 4 feet in diameter, but as you increase the diameter, the thickness of the wall must also increase. To get the average density to equal air, the diameter must also increase, so there's never a point where a metal ball can float in air, I am convinced.

As discussed previously, a 500 meter iron asteroid would have a trillion dollars worth of Ni at current prices. (100 million tonnes at $10/kg). Current mining production is about 2 million tonnes per year, so one asteroid would be a 50 year supply. (There are about 130 million tonnes of nickel in known, unmined reserves.) So if we could figure out a cheap way to get such masses down to Earth's surface, there is definitely some money to be made.

As for lithobraking, why would a desert be preferable to say, an ocean, or lake, or maybe even a big glacier?
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Offline RonM

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #46 on: 04/25/2017 01:42 PM »
As for lithobraking, why would a desert be preferable to say, an ocean, or lake, or maybe even a big glacier?

Easier to find and recover the material.

Online TrevorMonty

Re: Goldman Sachs Report on Asteroid Mining
« Reply #47 on: 04/25/2017 07:59 PM »
For high value metals like gold and platinum, they could be returned to earth in reusable 2nd stage. Assuming moon or asteriod water extraction is already in place, the metals can be delivered to LEO on water/fuel tanker as secondary payload. A 1t gold would take up very little space in 2nd stage but could add a few $M to mission profit for normally unprofitable return leg.

Even if water isn't being return to LEO a OTV still needs to return so a extra few $M on this leg from   1t gold would help profit margin.


Offline JH

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #48 on: 04/27/2017 01:23 AM »
Wasn't Planetary Resources looking into foaming metals for return? The idea being that by drastically decreasing areal density, you could just aim the material at some open land and then pick up the (flattened) pieces.

Offline dodo

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #49 on: 05/04/2017 06:21 AM »
Small out-of-the-box, ignorant contribution: just let the material crash-burn into a deserted area. Repeated application of this would enrich the area for traditional mining.

P.S.: That said, with the obvious consideration for the value of goods already in orbit and usable up there.
« Last Edit: 05/04/2017 06:35 AM by dodo »

Offline saliva_sweet

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #50 on: 05/10/2017 08:01 PM »
What kind of temperature would a chunk of metal reach if allowed to reenter on its own? PGMs don't burn I think. They could boil away, but would have to get pretty hot to do so.

Offline whitelancer64

Re: Goldman Sachs Report on Asteroid Mining
« Reply #51 on: 05/10/2017 08:27 PM »
What kind of temperature would a chunk of metal reach if allowed to reenter on its own? PGMs don't burn I think. They could boil away, but would have to get pretty hot to do so.

It wouldn't melt, but some portion of it would ablate away. Best to have it shaped into a sphere-cone shape and coated in a heatshield material to minimize any losses.
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Online envy887

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #52 on: 05/16/2017 02:31 PM »
What kind of temperature would a chunk of metal reach if allowed to reenter on its own? PGMs don't burn I think. They could boil away, but would have to get pretty hot to do so.

It wouldn't vaporize on reentry, but it might when it hits the ground at Mach 10.

Offline IRobot

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Re: Goldman Sachs Report on Asteroid Mining
« Reply #53 on: 05/16/2017 02:46 PM »
Why not making a "dumb" container with some parachutes activated by pressure?
The container does not have to be pressurized, so it could be made in modules, launched folded and assembled in space, to save volume. Parachutes would be just a box attached to one of the panels/struts.

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