4 ms·

None of these estimates seem to take into account that dumping huge quantities of precious metals on the free market will move the price by a substantial amount

by Expez 11y ago

None of these estimates seem to take into account that dumping huge quantities of precious metals on the free market will move the price by a substantial amount. Asteroid mining might only be profitable for a short while...

jp555 11y ago
Aluminum was more expensive than gold (used to top the Washington Monument instead of gold) before a radically cheaper way to purify it was discovered. Now we wrap our food in it, and there is a massive aluminum market only because it's plentiful and cheap.
creshal 11y ago
That depends on the amount and time scale. The quoted $50 billion platinum asteroid would contain around 2500 tons – the equivalent of 15 years worth of terrestrial production –, and most certainly not in a pure form. Mining all that and returning it to Earth safely is likely a long-term project.
- lsaferite 11y ago
  I guess what should really be considered is, why would you return the raw ore to earth? The dawn of space mining will trigger the dawn of space refining and manufacturing I think.
  - creshal 11y ago
    You'd still have to return the final products. And with something like platinum, which is used in tiny traces, stuffing half a ton in bars into a Soyuz and sending it back would probably be more profitable than, say, building whole exhaust catalysts in space and returning those.
    - lsaferite 11y ago
      Well, I did say 'refining' in addition to manufacturing. In some cases refined raw material makes sense to deorbit. But if you consider the costs of lifting objects to orbit, the ability to manufacture large mass components in orbit would be a huge win. Sure, the initial costs of getting to the point where you can manufacture in orbit are large. But, if space mining becomes profitable they'll need more and more gear to do this. If they have to lift all that gear off earth then it is prohibitive. Hence space manufacturing is a self-help path for mining.
    - wlesieutre 11y ago
      I suspect lsaferite has space uses in mind for the resources. If you wanted to build a large moon base, or maybe a giant telescope dish on the moon, not having to lift your materials out of Earth's gravity is a huge bonus.
  - bobcostas55 11y ago
    AFAIK getting rid of heat in space is still an enormous problem, making refining/manufacturing virtually impossible.
    - zardo 11y ago
      You would have asteroids to use as heat sinks.
    - lsaferite 11y ago
      Isn't it as easy as shielding a radiator from the sun though? I profess, I have no real knowledge, just an assumption.
- oneJob 11y ago
  True, but the markets prices assets at "Net Present Value" and often has long time horizons for their calculations. Think about an insurance company's portfolio. It will need assets to balance against liabilities which include human life insurance policies. Some business insurance policies can be for even longer time frames, think nuclear power plants. To balanced against those liabilities part of what you need is an investment with a similar time horizon. Now, the gold or whatever ore these companies mine may not have that horizon, but their company stock and some of their company debt certainly will. And since both their stock and debt valuations will be tied to the ore they mine and return, some of that correlation will find its way back to the price of gold, platinum, etc. But the price of gold will be impacted even more directly than that. A large percentage of precious metals are held for their store of value rather than their value in industrial uses. If, as an investor, I know that over then next 30 years the price of my investment will drop 20% or more, I plug those numbers into the NPV equation, and I get the hell out of that position untill the price comes down and is in line with what I'd pay for the metal almost at the cost of an industrial commodity. That's of course a simplified version of how it'd all play out, but the broad strokes are there. How long would you hold onto your home mortgage if you knew that at some point, you're not exactly sure when, but at some point you're home's value will plummet?
  - jostmey 11y ago
    So to keep the contents of what's inside the asteroid a trade secret. Nobody will know how much of what element will be dumped on the market.
    - oneJob 11y ago
      Works if you're going to privately finance everything, forgo insurance, and are able to keep all of your operations secret so that analysts are unable to estimate your operations by proxies such as fuel, craft size, the asteroids you're mining and their composition, etc. The physics of space flight are rather precise. Mass and density of the craft before and after visiting the asteroid can be worked out fairly easily with relatively few data points. Composition of the asteroid will possibly be known prior to visiting the asteroid, otherwise, why go to the expense of mining it? Could be exploratory, but then not even the people running the mission know the value of the asteroid's ore until the last minute, and in that case the market will likely have just about as good an estimate, or better, of the risk adjusted market value of the mission. Unfortunately, it's fairly difficult to keep all of this hidden due to the regulatory environment of the space industry and the wide open nature of "space". You can't really sneak out and back just staying low and below radar or benefit from the cover of darkness.
an_ko 11y ago
I don't know about these estimates specifically, but in a general sense, traditional miners discovering a new vein have the same problem. One can to some degree simulate the market and deduce if such plans are worthwhile. Once the legislation and insurance has figured itself out, the only difference in space is higher initial costs.
JulianMorrison 11y ago
On the other hand, dumping sufficient quantities may radically reshape the market. If gold was as cheap as copper, we'd be able to use if for things we currently can't. You may not any more make precious-metal profits, but you may not care if you're raking it in making modern-electronics profits.

by Expez 11y ago

jp555 11y ago

Aluminum was more expensive than gold (used to top the Washington Monument instead of gold) before a radically cheaper way to purify it was discovered. Now we wrap our food in it, and there is a massive aluminum market only because it's plentiful and cheap.

creshal 11y ago

That depends on the amount and time scale. The quoted $50 billion platinum asteroid would contain around 2500 tons – the equivalent of 15 years worth of terrestrial production –, and most certainly not in a pure form. Mining all that and returning it to Earth safely is likely a long-term project.

lsaferite 11y ago
I guess what should really be considered is, why would you return the raw ore to earth? The dawn of space mining will trigger the dawn of space refining and manufacturing I think.
- creshal 11y ago
  You'd still have to return the final products. And with something like platinum, which is used in tiny traces, stuffing half a ton in bars into a Soyuz and sending it back would probably be more profitable than, say, building whole exhaust catalysts in space and returning those.
  - lsaferite 11y ago
    Well, I did say 'refining' in addition to manufacturing. In some cases refined raw material makes sense to deorbit. But if you consider the costs of lifting objects to orbit, the ability to manufacture large mass components in orbit would be a huge win. Sure, the initial costs of getting to the point where you can manufacture in orbit are large. But, if space mining becomes profitable they'll need more and more gear to do this. If they have to lift all that gear off earth then it is prohibitive. Hence space manufacturing is a self-help path for mining.
  - wlesieutre 11y ago
    I suspect lsaferite has space uses in mind for the resources. If you wanted to build a large moon base, or maybe a giant telescope dish on the moon, not having to lift your materials out of Earth's gravity is a huge bonus.
- bobcostas55 11y ago
  AFAIK getting rid of heat in space is still an enormous problem, making refining/manufacturing virtually impossible.
  - zardo 11y ago
    You would have asteroids to use as heat sinks.
  - lsaferite 11y ago
    Isn't it as easy as shielding a radiator from the sun though? I profess, I have no real knowledge, just an assumption.
oneJob 11y ago
True, but the markets prices assets at "Net Present Value" and often has long time horizons for their calculations. Think about an insurance company's portfolio. It will need assets to balance against liabilities which include human life insurance policies. Some business insurance policies can be for even longer time frames, think nuclear power plants. To balanced against those liabilities part of what you need is an investment with a similar time horizon. Now, the gold or whatever ore these companies mine may not have that horizon, but their company stock and some of their company debt certainly will. And since both their stock and debt valuations will be tied to the ore they mine and return, some of that correlation will find its way back to the price of gold, platinum, etc. But the price of gold will be impacted even more directly than that. A large percentage of precious metals are held for their store of value rather than their value in industrial uses. If, as an investor, I know that over then next 30 years the price of my investment will drop 20% or more, I plug those numbers into the NPV equation, and I get the hell out of that position untill the price comes down and is in line with what I'd pay for the metal almost at the cost of an industrial commodity. That's of course a simplified version of how it'd all play out, but the broad strokes are there. How long would you hold onto your home mortgage if you knew that at some point, you're not exactly sure when, but at some point you're home's value will plummet?
- jostmey 11y ago
  So to keep the contents of what's inside the asteroid a trade secret. Nobody will know how much of what element will be dumped on the market.
  - oneJob 11y ago
    Works if you're going to privately finance everything, forgo insurance, and are able to keep all of your operations secret so that analysts are unable to estimate your operations by proxies such as fuel, craft size, the asteroids you're mining and their composition, etc. The physics of space flight are rather precise. Mass and density of the craft before and after visiting the asteroid can be worked out fairly easily with relatively few data points. Composition of the asteroid will possibly be known prior to visiting the asteroid, otherwise, why go to the expense of mining it? Could be exploratory, but then not even the people running the mission know the value of the asteroid's ore until the last minute, and in that case the market will likely have just about as good an estimate, or better, of the risk adjusted market value of the mission. Unfortunately, it's fairly difficult to keep all of this hidden due to the regulatory environment of the space industry and the wide open nature of "space". You can't really sneak out and back just staying low and below radar or benefit from the cover of darkness.

an_ko 11y ago

I don't know about these estimates specifically, but in a general sense, traditional miners discovering a new vein have the same problem. One can to some degree simulate the market and deduce if such plans are worthwhile. Once the legislation and insurance has figured itself out, the only difference in space is higher initial costs.

JulianMorrison 11y ago

On the other hand, dumping sufficient quantities may radically reshape the market. If gold was as cheap as copper, we'd be able to use if for things we currently can't. You may not any more make precious-metal profits, but you may not care if you're raking it in making modern-electronics profits.