
Mining asteroids: Going platinum - evo_9
http://www.economist.com/node/21553419
======
maaku
I'm going to be canceling my subscription to the Economist. I've always liked
their approach to many issues--“follow the money” is always good advice in
journalism.

But this is a case where not only did they ignore the substantive details of
the press event (Diamandis and Anderson made clear the economic case was based
more on in-space use of extracted resources and the birth on Earth of new
industrial techniques using once-scarce platinum group metals, and Lewicki
explained in sufficient detail how they would achieve order-of-magnitude cost
adjustments compared with the NASA model), but they also made truly juvenile
mistakes in their economic analysis:

About $4 billion per year is spent on platinum for industrial uses. So if
you're sitting on a mountain of platinum you can hope for $4bn/yr revenue for
a larger amount of platinum at lower cost (given that's how much industry is
willing to spend on the metal), or realistically a value lower or higher based
on the the expected demand response to price. Platinum is primarily used in
the auto industry, jewelry, and electronics. General motors is not going to
sell more product because catalytic converters cost a few hundred dollars
less, but jewelers might and the electronics industry certainly would. Either
way, approx $4 billion per annum is nothing to sneeze at, and only one part of
their revenue model.

This is an industry I know _a lot_ about, which makes me wonder how accurate
their journalism is in other areas where I usually just take their word...

~~~
Retric
Your assuming that as soon as they start producing platinum domestic
production stops which seems unlikely unless they drive the price well below
1% it's current value. Still, suppose they have a 20% profit margin on 6
billion / year of raw materials 20 years from now. It would take a huge
investment to reach that kind of scale AND huge risks AND a poor ROI. It might
be possible, but it's a huge long shot and basic skepticism is reasonable.

~~~
maaku
Well, here's three things you're neglecting:

1) Planetary Resources is talking about getting access to 10's or 100's of
times more platinum than have ever been mined in human history, or even could
be extracted from the Earth's crust. "Domestic" production simply cannot scale
in this way.

2) Mining platinum is not a very profitable business--it comes out of the
Earth's curst in very low concentrations. Without a doubt extra-terrestrial
sources will always be able to undercut "domestic" suppliers without driving
prices so low.

3) No Earth-base operation would compete with a late-stage Planetary
Resources, because at any point they could flood the market and drive
competitors out of business. Earth-based mining firms will change their
business to extract resources for which return from asteroids remains
unprofitable.

~~~
Retric
1) Platinum is not what they are basing their business on. It's just an
example of mining asteroids not their only goal. Good old H20 is probably the
safest bet to start with.

2) This is why people don't 'mine' platinum. They extract it from the
leftovers when they mine copper / gold etc. The important question when
evaluating the response to increased supply is the cost of just that refining
step not including all the costs associated with getting to that point.

3) See 2. Unless they drive down the price of copper. However, flooding the
market drives down prices so rather than saying they can provide X you need to
look at how much they could sell 100 tons of platinum a year for. They can
also supply 100 tons of water into LEO a year but you can't look at the
current 1k to 20k/lb price of water in LEO and assume that's a constant when
their supplying a 100 ton's of the stuff.

------
SudarshanP
The KISS Papers about asteroid mining:
[http://www.kiss.caltech.edu/study/asteroid/20120307_IEEE_Pre...](http://www.kiss.caltech.edu/study/asteroid/20120307_IEEE_Presentation.pdf)
[http://www.kiss.caltech.edu/study/asteroid/asteroid_final_re...](http://www.kiss.caltech.edu/study/asteroid/asteroid_final_report.pdf)
[http://www.kiss.caltech.edu/study/asteroid/20120314_ESA_ESTE...](http://www.kiss.caltech.edu/study/asteroid/20120314_ESA_ESTEC.pdf)

------
Rhapso
"More than $2.5 billion." and "need to be capitalised to the tune of $100
billion." This is about how much the Apollo program cost[1]. If they get some
smart engineers and listen to them, I expect they will find ways we never
conceived of to save money. These cost numbers are perfectly achievable over
the time-frame they are discussing, and if SpaceX is showing us anything it is
that when you take the government out of production, you can chop at least a
digit off this type of price.

[1] Lafleur, Claude (2010-03-08). "Costs of US piloted programs". The Space
Review. Retrieved February 18, 2012.

~~~
cma
SpaceX benefited enormously from free access to Government designs, and
through a propped up market for their product--Government.

~~~
jerf
The core of this argument is to try to demonstrate that the government is
somehow necessary. It once was, assuming for the sake of argument that Apollo
was desirable and necessary. But the fact is that regardless of the past, what
SpaceX is doing now, NASA can not do now for anything like the same price. If
NASA is doing the propping and _still_ can't do it at the same price, that's
still not a win in their column.

Look, just face up to it. The free market we have right now is doing something
the government we have right now can't. It's not like this proves very much on
its own.

------
philco
What I'm thoroughly confused about is the notion that mining asteroids is that
lucrative. The minerals/metals they're mining (example: Platinum) are worth
1,500 due to supply and demand. Only a few hundred tons of platinum are mined
on earth every year, restricting supply, thus driving the price up. If
thousands of tons of platinum were "imported" from an asteroid, wouldn't this
flood the market with supply and collapse the price?

What am I missing here?

~~~
Cushman
I think what's missing is the difference between _price_ and value. _Price_ is
determined in a straightforward way by supply and demand; value is something
more complicated.

Think of the comparison they used to aluminum: Until recently, aluminum was
far rarer and more valuable than gold by weight. Discovery of processes to
separate aluminum from its oxides made it cheaper than steel.

The _cost_ of aluminum plummeted. That's bad if you're heavily invested in
aluminum; it's good if you want to buy a car or an airplane.

It's the same deal for gold and platinum et cetera. We don't want them because
they're rare; we want them because they have excellent physical properties,
and in fact the cheaper they are the better that is for everyone.

The benefits of abundance of the rarest materials will create a new era of
human prosperity which cannot be quantified in terms of current economics.

Don't think of it as "sell gold". Think of it as "make computers faster".

~~~
im3w1l
Howto profit?

------
daniel-cussen
I really don't think they have to do the mining in space. Realistically, at
80% concentrations of metals, you don't mine the asteroid, you cut the
asteroid. In fact, copper cathodes, slabs of 70% copper, are already on metal
exchanges in Shanghai and London.

So what you do is, you break off small chunks and aim them--get ready for this
--at Earth. A small meteor does not do real harm, and there are tons of them
burning up in the atmosphere all the time. In addition, because you chose a
high-metal asteroid, it'll get to the surface largely intact--rockier
asteroids break up faster than iron-nickel asteroids.

Then, when it's on Earth, you recover it--maybe dredge it, if you sunk the
rock--and separate and refine it.

~~~
Natsu
> A small meteor does not do real harm, and there are tons of them burning up
> in the atmosphere all the time.

I won't say it can't be done, but there are significant challenges here that
you may be underestimating. Not the least of which is the fact that there is
no "suck" orbit.

You need quite a bit of energy to make the proper orbital adjustments to aim
the rock at a precise spot on earth (rather than some random ocean, somewhere
inaccessible, a major city...) and lumps of asteroid aren't exactly known for
being aerodynamic, making reentry calculations pretty unreasonable.

~~~
daniel-cussen
> lumps of asteroid aren't exactly known for being aerodynamic, making reentry
> calculations pretty unreasonable.

As long as you're cutting it, you could make it somewhat aerodynamic. However,
you have to remember a lot of the time you want reentry vehicles (or rocks) to
be round so that they get down in good condition.

In addition, you don't need to just fire it off into earth; you can attach a
computer and small rockets to it so it can subtly and cheaply correct its own
course. The energy you would need for this can be arbitrarily small:
<http://en.wikipedia.org/wiki/Edward_Belbruno>

------
Sapient
Does anyone have any ideas about what new uses might be found for these
precious metals should they ever become as cheap as any other metals?

Gold wiring would be superior to copper, what else?

~~~
leecbaker
Gold is an inferior conductor to copper, and is used in electronics because of
its corrosion resistance, and would not make better wire for most purposes.

------
9k9
"Broadly, there are two ways to get the goodies back to Earth. The first is to
attempt to mine a large NEA in its existing orbit, dropping off a payload
every time it passes by. That is the reason for the search for asteroids with
appropriate orbits. This approach will, however, require intelligent robots
which can work by themselves for years, digging and processing the desirable
material."

These asteroids will be a perfect place for malicious AI's to spawn...

~~~
stcredzero
It's entirely incorrect that the robots will have to work independently for
years. To be economical, they would need the ability to be assigned tasks at
granularities of hours, down to 20 minutes. If Planetary Resources engineers
can get it down to "retrieve material from sector XY" then the entire
operation could be controlled from Earth.

~~~
JoeAltmaier
First thing to do: make more robots from materials mined.

~~~
swalsh
The idea of entire space stations, and robots made from Platinum will always
sound crazy to my pre-abundance-platinum mind :D

~~~
khuey
The idea that we would make disposable drink containers out of aluminum would
have been crazy in most of the 1800s, when aluminum cost as much as silver.

