Mining Space: Star Gas, Base Metals, Gold
On the morning of July 11, 2021, Virgin Galactic (NASDAQ: SPCE) founder Richard Branson flew to space aboard the world’s first commercial tourist spacecraft, Virgin’s VSS Unity.
In doing so, he became the first person to travel above the Karman line in their own, privately-built spacecraft.
The flight has been called a historic milestone for the emerging space tourism industry — and Virgin Galactic is already selling tickets aboard future space flights to the tune of $250,000 per seat.
Space tourism could certainly be a lucrative industry in the near-future. But it’s unlikely to be the most profitable activity humanity performs in space.
In fact, there’s far more money to be made bringing precious materials back down from space than there is sending rich folks up into it.
Goldman Sachs even says this is what will create the world’s first trillionaire!
Helium is the second-most-abundant element in the universe, but is vanishingly rare on Earth.
That’s a problem, given the gas’s criticality in the operation of MRI machines, the manufacture of semiconductors and the development of experimental nuclear fusion reactors.
The U.S. government has sold off its reserves. And with demand ramping up for so-called “star gas”... the world is headed towards a potentially-catastrophic shortage.
Fortunately, the Moon is rich in helium-3 — the isotope most useful as fuel for nuclear fusion reactors.
There are an estimated 1.1 million tons of helium-3 trapped in moon rocks, compared to just 1 metric ton of the stuff here on Earth. (Most of the terrestrial helium supply is helium-4, and it’s pretty small as well).
Humanity may not have much of an industrial demand for fusion fuels yet; that technology is still several decades away from mainstream viability.
The same cannot be said of electric cars, which are already hitting roads by the thousands and are expected to account for nearly 100% of global car sales by 2040.
Electric car motors use a number of relatively rare industrial metals like nickel and cobalt, whose terrestrial supplies lie mostly in conflict zones. It’s no wonder their prices have been on such steady upward trajectories in recent years…
More than 70% of the world’s cobalt is extracted in the civil-war-addled Democratic Republic of the Congo, where many mines are controlled by militias that use child labor. And the world’s largest producers of nickel are extractive Indonesian mining operations in West Papua that have been accused of violence against indigenous people in the region.
In short, it’s hard to dig up the industrial metals used for electric car production here on Earth without also digging up a bunch of human rights violations.
But these metals can be found in vast quantities on near-Earth asteroids — and there have already been limited attempts to mine them. Last year, Japan’s Hayabusa 2 spacecraft extracted several stone and metal samples from a nearby asteroid called Ryugu and returned them to Earth.
Based on the significant quantities of nickel and cobalt recovered, prospectors have estimated that Ryugu is worth some $83 billion alone.
Less than 200,000 tonnes of gold have been mined in the whole of human history. The entire quantity is just enough to fill up a 21-meter cube. And more than two thirds of that quantity has been mined since 1950.
On a long enough timescale, humanity will eventually deplete the Earth’s gold reserves — and will have to look to the cosmos for more of the yellow metal.
Image credit: NASA
Fortunately, there’s plenty of it floating around our planetary neighborhood. A recently-announced NASA-SpaceX mission called Psyche will examine a 266-kilometer-wide metal-rock asteroid called 16 Psyche, which is believed to have a solid gold core — and a market value of more than $1 quadrillion.
How Far Are We From Space Mining?
It’s important to note that the space mining industry is in its infancy, or younger.
The private sector, as demonstrated by Mr. Branson’s recent flight, is still only barely capable of launching anything into space, much less extracting materials from another celestial body and returning them to Earth.
It takes ten or so years to bring a new mine online here on Earth. Forging a new frontier will no doubt take even longer and have much higher production costs than the metals or gases are currently worth.
For at least the next decade, space mining will likely progress through “proof of concept” government missions like Japan’s Hayabusa and NASA’s Psyche.
Fortunately, many of the rare materials we’ve discussed in this report — even helium — have recently become the focus of novel materials firms that are tapping innovative production methods to solve global shortages.
You can see all the details right here.
Call it like you see it,
Editor, Daily Profit Cycle
Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Foundational Profits, Family Office Advantage, and Hodge Family Office . He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
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