Planetary Resources

[Tass]

And there's my point of doubt. That concentration may be worth processing on earth. But how do you extract it in space for transport?

They've said something about melting most things other than PMGs with a solar furnace, since PMGs have very high melting points. I don't now if this is possible or if the PMGs would dissolve in the molten iron (that might be a reason to go for LL chondrites rather than M-types).

I don't know how they plan to separate possible traces of solid PMGs from the melt either.   

[Warren Platts]

Of course, anyone even considering this line of business plans to bring back platinum (at first) in quantities of metric tons at a time, not hundreds of tons. The crashing the market would happen much later, when we have warp drive and starships, or at least much more sophisticated transport systems.

If you look at a potential business plan resulting in mid-term delivery of one ton payloads back to Earth, if the infrastructure to make this happen is feasible, then the plan makes some sense. That is why I say that "they will crash the market so it doesn't make economic sense" is a canard.

But if they don't crash the market it doesn't make sense either. Bringing back 1 mT at a time probably isn't going to be worth it, as a single tonne of Pt is only worth $50M.

After all, let's consider what they're really trying to do: what they're really trying to do is build a privately funded, major space program. And how much money does it take to fund a major space program? $1B or $10B? Considering that the Golden Spike Company figures they need to charge $1.5B for a single, light-weight sortie to the Moon, (let alone the fact that the entire NASA budget is ~$20B/year) I'd say the answer is closer to $10B than $1B.

And $10B is not a lot of money in the grand scheme of things. I think Exxon-Mobile brings in ~$100B every quarter. And these guys are saying that the world's first trillionaire is going to come from space mining. Thus, consider what it takes to get to $10B:

$50K/kg * 200 mT = $10B

But 200 mT is the current, entire production of Pt on Planet Earth. So they're stuck in a conundrum: either they produce enough PGM's to be worth it, in which case they crash the market; or else they don't crash the market, in which case they can't make enough $$$ to be worth it....

[Tass]

A couple of points: Those billions are per year. I think a billion a year could keep them running. That's only ten percent of the market then.

There's the other PMG's worth about as much combined as platinum is alone IIRC. That would put the market share at a billion per year down to 5%.

They also plan to sell volatiles for propellant in space. Depends heavily on what sort of private and public BLEO missions get rolling in the next decade, but that could also supply part of the cash to keep their space program going.

[oldAtlas_Eguy]

PR is all about the creation of an abundant source of raw materials. Without a cheaper abundant source than shipping everything from Earth, large scale projects like O'Neil habitats and SPS will not be economically viable. Once a source exists then there will be economic incentives to develop the processing systems to produce refined material and then large scale production of construction elements and solar cells.

Remember the minimum economic value of such elements is equal to the cost of manufacturing them on Earth plus the cost of launching them to their in-space destination. On Earth such elements have a value by weight of $1-10/kg. If it costs $50/kg to manufacture such elements from asteroid material in space but it would cost >$100/kg to launch such elements from Earth then there is a tremendous economic incentive to develop such systems. (BTW current best projected LEO rates in 10+ years from now using a SpaceX MCT based booster is >$250/kg.)
But here is the catch: these incentives would only exist if large scale commercial projects get a tremendous amount of funding to make them come to life. At the moment the investors are waiting on an abundant material source and more demonstrated in-space processing and manufacturing systems before committing to such expensive large scale projects. They want to limit their economic risks that such projects will actually make money for them.

Currently the highest risk is the mining, because there is currently no existing market in-space for the material of the Moon or asteroids. The same could be said for the refineries of the material. But they have actually a less economic risk because they have a material source and the start of an in-space infrastructure that some of their products would be sold to such as water used for propellant. Once some in-space refining is established, then economic incentives mount for the start of larger projects requiring other in-space refining and manufacturing capabilities. As more in-space manufacturing exists then the economic risks shrink rapidly for very large projects making investment incentives for very large investments in these projects to become as common as any other large investments. At this point the total investments in in-space projects swamp what we have been used to, the few billion a year commercial investment, to the 10 to 100 billion a year investment and the ROI time between start and a return is also much shorter from 10's of years to less than 5 years.

[Danderman]

But if they don't crash the market it doesn't make sense either. Bringing back 1 mT at a time probably isn't going to be worth it, as a single tonne of Pt is only worth $50M.

After all, let's consider what they're really trying to do: what they're really trying to do is build a privately funded, major space program. And how much money does it take to fund a major space program? $1B or $10B? Considering that the Golden Spike Company figures they need to charge $1.5B for a single, light-weight sortie to the Moon, (let alone the fact that the entire NASA budget is ~$20B/year) I'd say the answer is closer to $10B than $1B.

And $10B is not a lot of money in the grand scheme of things. I think Exxon-Mobile brings in ~$100B every quarter. And these guys are saying that the world's first trillionaire is going to come from space mining. Thus, consider what it takes to get to $10B:

$50K/kg * 200 mT = $10B

But 200 mT is the current, entire production of Pt on Planet Earth. So they're stuck in a conundrum: either they produce enough PGM's to be worth it, in which case they crash the market; or else they don't crash the market, in which case they can't make enough $$$ to be worth it....

Nope.

Common sense dictates that they will optimize their operations IF and WHEN they return their first ore/platinum.

Since they are not stupid, they will not bring back 200 tons the first year, they will bring back what makes economic sense. Your argument boils down to that they won't.

Having said that, this is all fairy dust anyway, I am just saying that if you believe in fairy dust, you have to believe that the fairies are rationale.

The reason that I say this is fairy dust is that it violates Anderman's First Law of Space Startups:

"Any new space company that requires investor funding AND requires more than One Economic Cycle to get to revenue is doomed".

[oldAtlas_Eguy]

I think we are getting way too far ahead in thinking that you have to mine and produce PGM's in order to be a successful asteroid miner. The 50-100lbs of samples returned from a sample return flight would have significant market value in the order of $100K's to $1M's per lb to the scientific and collectors markets. If NASA is willing to shell out millions for just information on a GLXP flight how much do you think 10lbs of asteroid rock will fetch. Between selling info and the returned samples it would be possible for an asteroid sample return flight to make a profit. 100lbs of asteroid rock could have a value as much as $100M.

[LegendCJS]

I think we are getting way too far ahead in thinking that you have to mine and produce PGM's in order to be a successful asteroid miner. The 50-100lbs of samples returned from a sample return flight would have significant market value in the order of $100K's to $1M's per lb to the scientific and collectors markets. If NASA is willing to shell out millions for just information on a GLXP flight how much do you think 10lbs of asteroid rock will fetch. Between selling info and the returned samples it would be possible for an asteroid sample return flight to make a profit. 100lbs of asteroid rock could have a value as much as $100M.

Maybe collectors markets would pay those prices, but getting a "profit" out of university labs who are struggling to get any grant money to do anything now days (thanks sequester..), let alone study something with such large practical industrial application like space rocks </sarcasm>, is a pretty far fetched idea.

A lab might really want and be willing to pay for a sample, but only if enough prior work has been done to have a guarentee of the sample's context so that the lab knows ahead of time that it will shed light on whatever project/ theory they are investigating.  Labs might contract with middlemen who know meteorite scavengers and collectors in regions like Northwest Africa to buy samples at street market prices in a third world market, nothing like the prices you would need to drive a profit for a space mining firm.  University labs usually get the majority of their samples for study by petitioning museums, other academic institutions, and other non-profit store houses of space rock collections

Frankly the vast majority of this kind of research is publicly funded.  When grants are written they include budgets and scientific payoffs.  Grant approval boards weight the costs and risks of each proposal and decide accordingly.  With limited funds for everyone and a very present sense of responsibility to spend the money to keep the field as a whole healthy and functioning, sinking huge $$ into paying for samples just isn't going to happen on a level that significantly figures into any companies business plans.  And frankly large quantities of material really aren't required for most kinds of science. 

If Planetary Resources is picking the targets, I would think that deals will probably be worked out to allow use of public space infrastructure (like DSN) in exchange for portions of of returned material for public study.  However, if space science and funding agencies are allowed to pick the targets there might actually be some money in it for Planetary Resources.  In the examples of payments for data products you mentioned, it was boards of scientists that decided exactly what type of data and for what target it was worth the use of funds.  But the goals of Planetary resources may not align well with those of scientists.  For example:

One of the current hot topic scientific controversies with asteroids is a debate about whether some asteroids can come form parent bodies that have partially differentiated.  This would mean searching for the kinds of asteroids that have mixtures of crustal material and core material in them.  A partially differentiated asteroid is not a good candidate for striking it rich in PMGs.

[Warren Platts]

The reason that I say this is fairy dust is that it violates Anderman's First Law of Space Startups:

"Any new space company that requires investor funding AND requires more than One Economic Cycle to get to revenue is doomed".

This is interesting: Could you expand on it a little? E.g., what is your definition of an economic cycle?

[Warren Platts]

I think we are getting way too far ahead in thinking that you have to mine and produce PGM's in order to be a successful asteroid miner. The 50-100lbs of samples returned from a sample return flight would have significant market value in the order of $100K's to $1M's per lb to the scientific and collectors markets. If NASA is willing to shell out millions for just information on a GLXP flight how much do you think 10lbs of asteroid rock will fetch. Between selling info and the returned samples it would be possible for an asteroid sample return flight to make a profit. 100lbs of asteroid rock could have a value as much as $100M.

Yeah, I can't see asteroidal PGM's as a GO in the semi-near-term at  all. However, I can see how producing propellant might just possibly perhaps work if they did it just right. The problem with that is that the process of finding, prospecting, lassoing, and finally producing water-bearing NEA's is a decade long process at a minimum for each asteroid, and, until there is a major inspace construction project like SPSP, you'll never get to be a trillionaire, as the semi-nearterm market for propellant is low billions/year at best.

[oldAtlas_Eguy]

Another materials market not normally looked at is the very high grade IC silicon market. The total IC grade silicon usage per year, which excludes the much lower grade solar cell silicon, is 50,000 metric tons/yr. The value of this varies from a few dollars per oz to over $10 per oz depending on whether it is used in much older technology ICs or on the newest microprocessors. (Solar cell silicon sells for about $.50 per ounce, although this quality silicon would be more valuable for use in space it is not worth shipping to Earth.) A metric ton of the highest grade silicon is worth ~$400,000. 10,000mt/yr would be $4B per year. Chip manufacturers spend millions to billions in developing equipment to produce ever greater purity silicon for use in each new generation of microprocessors. Growth of silicon monocrystals in zero G can offer a way to produce such silicon in a purity level not obtainable on Earth.

So look at the possibilities at the edges of the materials markets where the unique space environment could yield purities or alloys not obtainable on Earth and determine what those would be worth if available in significant quantity on Earth. If space competes with what is already available on Earth space will likely fail from a business perspective.

[Danderman]

With launch costs well over $1,000 a ton, you would probably have to see overall costs drop quite a bit to make silicon a viable product from space mining.

Although small dollars in quantity can make big dollars, there are probably variable costs that cannot be overcome unless space costs in general drop a lot.

[Soralin]

It seems a key turning point for long-term success would be if they can manage to produce their own propellent.  Bringing back water and splitting it, or using electric propulsion capable of using commonly available materials as propellent, or something similar.

If you can only make one mining trip out and back, that's a rather large limitation.  On the other hand, if they can refuel, using material they themselves mined, one mining ship could repeat the process indefinitely until it fell apart.

[JohnFornaro]

PR is all about the creation of an abundant source of raw materials. Without a cheaper abundant source than shipping everything from Earth, large scale projects like O'Neil habitats and SPS will not be economically viable.

Absolutely.

[/quote]Once a source exists then there will be economic incentives to develop the processing systems to produce refined material and then large scale production of construction elements and solar cells.[/quote]

Not absolutely.

Once a source is found, perhaps the economic incentives will also be found to reduce launch costs.  If that reduction takes place, and if a new terrestrial use for, say, platinum becomes apparent, and if the material can be refined, and if the material can be brought back, then that could be an income source.

Or...

Once a source is found, perhaps the economic incentives will also be found to reduce launch costs.  If that reduction takes place and if there are profitable justifications for building large scale "construction elements and solar cells" in space, then that could be an income source.

As you later mention, there would certainly be some kind of scientific terrestrial market for samples, regardless of their mineral assay.  As the scientific samples became more common, their price would go down. 

If they did find a "solid platinum" rock, you can be sure that the orbit of that rock would be a closely guarded piece of proprietary info. They would have to work out the economics of crashing the world market while they worked out the pragmatics of bringing it back.

Your suggestion that high quality silicon might pay the bills seems even less likely, since the product has such a low value to start with.

Propellant is always useful up there, and will be for the foreseeable future.

[oldAtlas_Eguy]

It's not the price of $400 to $1000 per kg for the super high quality silicon but its volume in the 1,000-10,000's of metric tons. Silicon in asteriods is almost a slag waste product. But if it is then processed into a form that has value this byproduct can yeild additional revenue. The more revenue streams from your processing of the material mined the better.

Later when the in-space manufacturing capabilities increase along with infrastructure and large scale habitats, the silcon would probably never be shipped to Earth but used locally in-space with rare earths to manufacture micro-processor chips that is then shipped to Earth as finished products. Chip manufacture produces some very nassty environmental toxic wastes, and its movement to manufacturing in space for high value items of very low weight is a good progression for the chip manufacturing industry. This is a several decades (> 30yrs) out projection which requires that practically in-space industry is a very large economic engine in the GDP range of trillions $.

[Lar]

With launch costs well over $1,000 a ton, you would probably have to see overall costs drop quite a bit to make silicon a viable product from space mining.

Although small dollars in quantity can make big dollars, there are probably variable costs that cannot be overcome unless space costs in general drop a lot.

I'm not sure I am following you there. How many tonnes do you need to launch to make a viable processing plant? Once you've launched those, what additional launches do you need to keep the plant running?

And can you make reentry vehicles via ISRU?

I don't think that launch costs are the first order cost driver here.

[Danderman]

It's the classic issue of your fixed costs  increasing as you also gain revenue; to generate the marginal ton of silicon, your marginal expenses increase accordingly, so there are no significant economies of scale, except for the costs of establishing the silicon mine in the first place.

Space is expensive.

The PR business plan admittedly only gets to revenue decades from now (revenue from mining, that is; they may sell telescopes to get $$ in the near term). That revenue would be from valuable products, such as water and platinum. To get revenue from silicon would be many further years downstream, and it is difficult to calculate values that far away.

[Solman]

It's the classic issue of your fixed costs  increasing as you also gain revenue; to generate the marginal ton of silicon, your marginal expenses increase accordingly, so there are no significant economies of scale, except for the costs of establishing the silicon mine in the first place.

Space is expensive.

The PR business plan admittedly only gets to revenue decades from now (revenue from mining, that is; they may sell telescopes to get $$ in the near term). That revenue would be from valuable products, such as water and platinum. To get revenue from silicon would be many further years downstream, and it is difficult to calculate values that far away.

 If the asteroid or asteroid mined material is returned to a GEO based refinery for water and platinum extraction, there would be material left over that could be extracted such as silicon. Cost would depend on the method used to refine it and how much commonality the equipment to do this has with the platinum and water refining equipment wouldn't it? Vacuum pyrolysis for example could produce pure silicon as a by-product.
 PR foresees using in-situ metal foam based re-entry so if this is developed the cost to bring products down to Earth could be fairly low.
 The low latency at GEO suggests, to me at least, that tele-operated refining and manufacturing there would work well with NEO derived resources.     

[Danderman]

It is difficult to determine if magic pixie dust acquisition is a fixed or variable cost.

[Solman]

It is difficult to determine if magic pixie dust acquisition is a fixed or variable cost.

 Wasn't asteroid mining a "pixie dust" sort of concept until recently?

[Danderman]

It is difficult to determine if magic pixie dust acquisition is a fixed or variable cost.

 Wasn't asteroid mining a "pixie dust" sort of concept until recently?

It still is.

Prospecting asteroids might have some reality to it, but the actual extraction and return of valuable materials is a long way in the future.

In that world where you are talking about mining asteroids, you might as well invoke return of He-3 to fuel all the nuclear fusion reactors that will built.