Asteroid mining hasn’t even gotten off the ground yet.
But it’s already drawing some bad – and very misguided – press.
I wrote to you last month to tell you about a new startup that wants to mine asteroids for resources that could be worth trillions. Indeed, as I said, just one of these rocks the size of an art museum could be worth $100 billion. (See “‘Mining the Sky’ for an Abundant Future.”)
I also told you to keep an eye on Planetary Resources and its breakthrough high-tech system as a possible future investment. Not only does the new firm have the backing of several billionaires, it also has the support of the U.S. government.
And let’s not forget our friends across the pond…
This month, the European Space Agency will begin training a team to land on one of these giant space rocks and return with samples for researchers to study. They want to tap asteroids for metals and minerals, too.
Clearly, some very bright leaders all over the world believe “mining the sky” will be a key part of our future.
That’s why I still believe the question isn’t if we will mine asteroids, but when.
But in a story last Tuesday, none other than The Wall Street Journal tried to cast doubt on the whole concept.
The headline says it all: “Exhausting Earth’s Resources? Not So Fast.”
The central part of the report is that Earth has more resources than we can dig up in decades.
As a long-time Journal reader, I have to say I was surprised the writer was so naive. The article focused on only one aspect of space mining – that Earth is running out of resources like gold, silver, and platinum. As I see it, the Journal was bending over backwards to support the current, terrestrial mining industry.
Because there’s much more to the story than that…
Here’s the thing.
We really are reaching the practical resource limit here on Earth, for three main reasons – cost, red tape, and politics.
1) First, while it’s true we have decades worth of gold and silver, getting those metals out of the ground remains a challenge and an extremely expensive proposition. All the easy-to-reach metals got mined out long ago. Today, you have to crush tons of rock to get just a few ounces of gold.
So there’s a lot of room for asteroid mining to become easier and less expensive than conventional mining.
2) Second, governments around the world keep adding new regulations.
No doubt, some of that stems from safety concerns. For instance, Europe contains several deposits of the rare earth minerals needed for many high-tech gadgets, such as smart phones. There’s just one problem. The tracts contain radioactive rocks, too. For obvious reasons, Europe doesn’t want workers exposed to the hazards of radiation, so the government refuses to grant mining permits in such cases.
And here in the U.S., state and federal regulators remain committed to protecting the public against mining pollution.
Take the case of the Mountain Pass rare-earth mine near California’s Mojave Desert. Though it was the only U.S. rare earth mine, it closed in several years ago in part because of pressure over contaminated wastewater. After a major cleanup effort to meet government standards, it recently reopened. The mine now belongs to Molycorp Inc. (NYSE:MCP) and is the largest operating rare-earth mine in the western world.
3) Finally, politics also drive up the cost of mining by making it an uncertain business in a volatile world.
To see what I mean, just look at recent events in Peru, a world leader in metals mining. When former leftist rebel Ollanta Humala became president last year, many feared he would hit miners with huge taxes. Or even worse… nationalize their firms.
Just the reverse has occurred.
Humala has cracked down on massive protests over a $4.8 billion Conga gold and copper mine. He even declared a state of emergency after 10,000 rioters clashed with police and shut down a regional airport. Now, should Humala lose power, that would cast grave doubt on that mine’s future and its value for investors.
All of this goes to show that mining here on Earth doesn’t just center on the amount of reserves we have in the ground. It’s all about what you can feasibly dig up.
Not so in outer space.
Since there is no life form we know of on asteroids, we don’t have to worry about hurting a rare species. There are no rivers to pollute or skies to poison. Only a thriving commercial space sector awaits. (See “Why I’m Watching Tomorrow’s Rocket Launch.”)
Speaking of which, there’s another big reason I believe we will mine asteroids in the Era of Radical Change.
We need to tap these orbiting rocks to support a vast new space system that will emerge in the near future. That’s because commercial space travel will become a regular part of our lives in the very near future.
I believe the U.S. and other nations will build hundreds of new space ships and satellites. We will send them to the far reaches of our solar system.
Getting all the needed supplies from Earth and transporting them into outer space is just too costly. That means we must gather supplies along the way.
So, no matter what the Wall Street Journal says, you can bet that we will mine asteroids, and that it will be a key part of life in the Era of Radical Change.