Economics of the Stars: The Future of Asteroid Mining and the Global Economy

Economics of the Stars: The Future of Asteroid Mining and the Global Economy

. 6 min read

As the consequences of environmental degradation and natural resource depletion become increasingly severe, scientists are placing a greater emphasis on not only sustainably utilizing the resources that we already have, but also on identifying new methods of obtaining resources. For example, scientists are pursuing novel but contentious resource extraction techniques such as fracking. One particular suggested solution, asteroid mining, is literally out of this world.

Although proposed many times, the first tangible effort to enable the exploration and development of asteroid mining came in 2012 from Planetary Resources, a Seattle-based aerospace company. Planetary Resources were then closely followed by a similar company, Deep Space Industries. Both groups have made significant contributions to the field, designing satellites that have identified about 15,000 asteroids with significant potential for mining.

Opportunities in Asteroid Mining

Generally, asteroid mining remains hypothetical, mostly because of its exorbitant cost. While specific estimates of the cost of commercial mining remain unclear, similarities can be drawn between such programs and NASA’s OSIRIS-REx mission, which seeks to obtain samples from a near-earth asteroid named Bennu. Despite only being projected to return between 400 grams and 1 kilogram of material, the mission is projected to take 7 years and cost over US$1 billion. Planetary Resources and Deep Space Industries were unable to finance themselves to meet such high development costs. Both companies were acquired by other businesses in 2018 and 2019, respectively.

Despite the high price tag, the development of asteroid mining technology may very well be a worthwhile endeavor due to the extremely valuable resources that asteroids have to offer. For example, Asterank, which measures the potential value of over 6,000 asteroids that NASA currently tracks, has determined that mining just the top 10 most cost-effective asteroids–that is, those that are both closest to Earth and greatest in value–would produce a profit of around US$1.5 trillion. There is also great potential for further expansion. One asteroid, 16 Psyche, has been reported to contain US$700 quintillion worth of gold, enough for every person on earth to receive about US$93 billion.

Such technology could also have a tangible environmental impact. Most notably, asteroid mining would prevent the need for traditional in-the-ground methods of mining, which release toxic chemicals such as lead and arsenic into waterways and contribute to acid mine drainage. Asteroid mining could also provide an avenue for the creation of solar power satellites, a potentially consistent source of clean energy. Most of the progress that has already been made on asteroid mining technology has been focused on extracting water, reflecting concerns of growing water shortages around the world.

Additionally, an important argument can be made that asteroid mining would reduce the prevalence of inhumane or otherwise illegal practices surrounding human mining operations. This would especially impact artisanal and small-scale mining (ASM) operations, operations that are not managed by larger mining companies. For example, recent attention has been focused on the Democratic Republic of the Congo. This country has responded to the growing global demand for batteries and electric vehicles through its cobalt supplies, of which it contains about 70 percent of the world’s resources. Although mining operations can be dangerous, a deplorable record of child labor and fatal accidents within Congolese ASM operations has highlighted the need for significant change. Asteroid mining as an alternative to traditional mining might be the kind of change the world requires to end these abuses of power.

Economic Impacts

Perhaps the most apparent impact of asteroid mining would be on the global economy. On one hand, it could produce significant wealth for individuals, with astrophysicist Neil DeGrasse Tyson, among others, even claiming that the first trillionaire will be an asteroid mining mogul. To this end, some argue that promoting asteroid mining technology could also be the key to developing a future space economy, ranging from tourism to settlement. However, many experts argue on the flip side that asteroid mining would quickly destroy the economy of global raw materials, currently valued at about US$660 billion. They claim this economy would be quickly overtaken by the quintillions of dollars worth of material from asteroid mining. Asteroid mining resources would flood the market, causing a rapid devaluation of global raw materials. Such a situation was simulated by researchers at Tel Aviv University. They predicted that a significant “global struggle for resources and power” would ensue in a world with asteroid mining. They came to this conclusion after creating a simulation in which one shipment of space minerals devalued the price of gold on Earth by 50 percent.

Notably, the Tel Aviv researchers also predicted that within this struggle, developing countries would be significantly affected because they heavily rely on mineral exports and do not have the resources to build their own asteroid mining operations. This perspective has not been extensively covered in the existing literature on the economics of space mining but could be a real possibility. Specifically, asteroid mining might allow one company to become responsible for the trading of a single natural resource, threatening countries that presently rely on resource exports. For example, some individual asteroids possess upwards of US$50 billion of platinum. In comparison, South Africa, the largest producer of platinum at about 72 percent of the world’s supply, mined only about US$3.8 billion worth of platinum in 2018, or 4.3 million ounces at an average price of US$882.18 per ounce. South Africa has greatly benefited from the use of its platinum resources as well as its many other mineral resources, with the industry employing over 451,000 people and comprising 8.2 percent of its GDP. In a future where asteroid mining becomes the norm, South Africa’s economic performance would shrivel, harming the livelihoods of many South Africans.

The situation is likely to be even more dire in other countries. Unlike South Africa, which has a fairly large and diverse economy and a budding space industry, Zimbabwe, another major platinum producer, would struggle substantially more if mining operations were overtaken. Zimbabwe would be especially affected given that the nation currently does not have the resources to develop space mining technology. With research efforts underway to determine the amount of other elements, including cobalt, on different asteroids, a wide variety of fledgling economies are at risk. For example, the possibility of obtaining cobalt from asteroids could wreck the Democratic Republic of the Congo’s cobalt mining operations. This would ultimately damage the nation’s entire economy.

While the individuals currently working in precarious mining conditions would likely be safer, they would also be out of a job. Even more importantly, the people losing their jobs, particularly low-income workers who do not have the skills for asteroid mining, would not be able to gain employment in the asteroid mining industry. Thus, there would be a permanent loss of these important low-skilled jobs for people in dire need of income.

Steps Forward

There are a few potential remedies to this issue. The first would involve expanding developing economies’ access to asteroid mining technologies so that more would have the potential to compete within a future space-oriented economy. Given that such operations would be heavily driven by private corporations, this might mean that developing countries would have to sponsor the presence of such companies in their borders, or bolster educational programs that would allow for the construction of these companies within the country. The second option would require the diversification of economies that are currently heavily reliant on mining technology. However, this is an already ongoing and relatively slow process that would see its shortcomings exacerbated by technological advances that only advantage wealthy nations. As suggested in the Tel Aviv University study, a third solution would be to develop a mechanism by which wealthier countries that use the technology would compensate less wealthy countries. Finally, policymakers could pursue efforts to responsibly regulate production. This would ensure that, even if asteroid mining became possible in large quantities, materials would only be produced at a comparable rate to current production. This could also decrease the likelihood of a tragedy of the commons situation, in which overuse depletes the availability of resources. Although perhaps unlikely due to the vastness of space, the limitations of human technology make this a possibility. Most current international treaties on space, like the Outer Space Treaty of 1967 and the Moon Agreement of 1979, are defined by their ambiguity. While this ambiguity is what has allowed countries like the United States and Luxembourg to pass legislation allowing private companies to commence asteroid mining, little has been said about the regulation of resources. The only resource regulation requires that the moon and celestial bodies, as whole objects, cannot be owned by a single country. As a result, many current debates still exist about who would be responsible for space regulation and how they would do so. While this is a necessary debate moving forward, it is imperative that such conversations not only involve countries with significant abilities to enter space and conduct asteroid mining operations but also those who stand to bear the brunt of its negative economic impacts. It is high time to bring all countries to the asteroid mining table.