Synopsis
Here is a summary of the paper “Prospects for Mining Asteroids: Into this World or Out of the Question”:
Overview
- The paper examines the economic feasibility of asteroid mining to supplement metal supplies on Earth.
- It develops a theoretical model for analyzing the profitability of space mining ventures.
- It also presents numerical simulations using data on space technology, asteroid composition, and metal markets.
Theoretical Model
- Space mining has high fixed costs (entry, overhead) and low variable costs.
- A firm will only enter if expected price > average total cost.
- It will stay in the market if price > variable cost.
- Profitability depends on:
- Residual demand curve based on terrestrial supply/demand
- Cost structure of space mining
- Asteroid composition
Numerical Simulations
- Simulate mining a 1,000-10,000 tonne metallic asteroid and returning it to Earth
- Base case assumptions:
- Current space technology
- Known asteroid compositions
- 2018 metal market data on prices, quantities, elasticities
- Find that space mining is unprofitable in near term under base case
- Would require optimistic assumptions or >80% cost reductions to become profitable
Conclusions
- Space mining is not economically feasible now for returning metals to Earth
- Prospects may improve in future with:
- Rising terrestrial prices
- Improving space technology
- Lower space operations costs
- More knowledge of asteroids
- But still seems unlikely to be profitable in near term
In summary, the paper develops a useful framework for analyzing space mining economics but finds it is not profitable now given what we know. Significant improvements in various factors would be needed to change this conclusion.
