One common trope of space journalism these days concerns the mining of asteroids or the Moon, sometimes combined with environmental handwringing over the aesthetic destruction we may bring to these soulless dino-killing space rocks. Moon mining, we are told, is a gold rush about to happen. In the process, a few people will get super wealthy selling shovels or shiny metal of some kind, and hopefully a few big cities will get built in space. Indeed, space mining is sometimes seen as the “killer app” necessary to fund and motivate large scale human occupation of space.

Advocates of the industrialization of space usually envision a bootstrapping process, wherein one core product provides the profit margin necessary to build out infrastructure and, eventually, move most of Earth’s industry into space.

The question: Where is the space gold mine? While industrial processes add value at every step, space is often seen initially as a source of raw materials. Specifically, asteroids, the Moon, or Mars are seen as sites for future mines. These mines could produce anything from water to gold, Helium-3 to platinum. In this post, I will cover factors general to all material products before diving into specific examples.

My contention is that there are no known commodity resources in space that could be sold profitably on Earth.

The key to a successful business is to obtain feedstocks for cheap and to sell products at a tidy profit. The problem with space mining is that the feedstocks are generally much more expensive than on Earth, and there is an extremely limited market for products, except on Earth. More broadly, for every industrially valuable ore, there is already a competitive and adequate, if not spectacular, supply chain here on Earth. If and when cities are built on the Moon or Mars, then local sourcing of raw materials makes sense in that context. But until then, the money, the financial resources, are here on Earth. So to make a killing in space, some sort of commodity needs to be obtained, transported to Earth, and sold, all for less money than conventional supply chains.

The challenge is that raw commodity margins on Earth are already super slim. The problem is that there are very few natural monopolies in mineral supply, so mining companies have to compete for market share, lowering prices.

More broadly, it is instructive to consider the value chain as raw materials are gradually processed into high value commercial goods, such as cell phones. Primary production obtains the ores needed to produce chemically pure elemental feedstocks, which are usually packaged in some standard, fungible way. Secondary production processes those feedstocks into individual components, such as the machining of an aluminium cell phone chassis from a raw billet. Finally, the various components are assembled, packaged, and sold. In something like a cell phone, value accrues at every step along this process, representing the revenue stream for each specialized supplier. As the designer and marketer, Apple pockets something like 30% of the sticker price of each phone sold, while the aluminium smelter takes home much less than 1%. A billet of aluminum is much closer in value to raw bauxite than a finished phone.

Similarly for minerals from space. The value per kg is of crucial importance for products where shipping costs are important, and the value per kg of nearly every commodity good is next to nothing.

But just how important are shipping costs? On Earth, bulk cargo costs are something like $0.10/kg to move raw materials or shipping containers almost anywhere with infrastructure. Launch costs are more like $2000/kg to LEO, and $10,000/kg from LEO back to Earth. Currently there is no commercially available service to ship stuff to and from the Moon, but without a diverse marketplace of launch providers, there’s no reason to expect that the de facto monopoly or duopoly of SpaceX and Blue Origin would sell it for less than $100,000/kg, literally a million times more expensive than shipping anywhere on Earth. Before we hate SpaceX for price gouging, it’s not certain that shipping for less than this amount is even possible, but one could relax this assumption by several orders of magnitude and still arrive at the same answer.

For nearly all commodities, shipping costs are a smallish fraction of the overall costs of purchase. More generally, of all the energy and labor embodied in a finished product, most of it is spent in refining, processing, design, and assembly, rather than transport. There are a handful of exceptions where shipping costs dominate the sticker price, usually in industries where transport is itself the product, and the cargo is extremely time sensitive. Shipping perishable food, flowers, and people are a good example.

Given that the Moon is not likely to (initially) be a source of perishable commodities nor enormous numbers of time-poor humans, it is safe to assume that whatever is produced there has to be so valuable on a per kilogram basis that buyers on Earth can absorb the shipping cost. The question then becomes, what commodities cost in the ballpark of $100,000/kg?

As an aside, one obvious way to sidestep the mass transportation requirement is to choose a product with no mass, such as electromagnetic radiation. And indeed, the most vibrant commercial space product is communications, which are beamed using microwaves. Raw microwaves can be used to transmit electrical power, but in a former post I demonstrated that space based solar power can’t compete with the rapid evolution of ground based solar power. Not even a little bit!

There are actually plenty of things which cost $100,000/kg or more in the high tech industries, such as advanced computer chips. The reason computer chips are so expensive (relative to mass) is that they’re extremely hard to make even at the Intel factory, which is stuffed with super smart people. In terms of the value chain, computer chips are at the complete opposite end to raw bulk commodities. Both items are sub ideal for obtaining in space, though for different reasons. Raw commodities have too little intrinsic value to justify the transport costs from space, or even usually from another continent. And high technology products are too expensive to make in any but ideal circumstances here on Earth.

There is a middle ground. The German economy, in particular, is powerfully driven by thousands of small specialty companies that make relatively small numbers of custom machines and tools. Individually, the machines are much more valuable than raw materials, and much less difficult to make than computer chips. But their true value derives from the network effect of having thousands of companies feeding off each other and, fundamentally, building the infrastructure of industrial automation for the rest of the world. There are a number of companies, such as Made In Space , which are actively pursuing bespoke in-space manufacture of specialty items, and there is every indication that their schemes are economically viable. But while they represent a golden ticket for one small engineering company, they lack a path to generalized space industry and the trillion dollar revenue that implies, at least without enormous advances in robotics.

So we’re left with a question about what commodities cost $100,000/kg, or $100/g, and could be found in space. In a previous post, we dispatched the idea of selling lunar water , which in any case is basically free on Earth. Comsats are routinely launched to space at vast expense, but fall in the category of advanced technology which is prohibitively difficult to manufacture in space. Launch may be expensive but it’s cheaper than launching the whole factory!

Let’s consider a representative list of the most expensive materials in the world. In descending order, they are:

Antimatter, currently $62.5t/g. Californium, $25m/g. Diamond, $55k/g. Tritium, $30k/g. Taaffite, $20k/g. Helium 3, $15k/g. Painite, $6k/g. Plutonium, $4k/g. LSD, $3k/g. Cocaine, $236/g. Heroin, $130/g. Rhino horn, $110/g. Crystal meth, $100/g. Platinum, $60/g. Rhodium, $58/g. Gold, $56/g. Saffron, $11/g.

The previous ballpark estimate for transport costs was $100,000/kg, or $100/g. Since I want to be inclusive, I’ll include everything down to saffron in the list above, whose cost is roughly equal to the current LEO-surface transport cost.

Despite their high value density, none of these make good candidates for commercial extraction from the Moon or asteroids, for a few different reasons.

Many do not exist on the Moon at all, or in relatively poor abundances compared to the Earth. This includes everything except for Helium-3, which is slightly more abundant in Lunar dirt.

Many are only valuable because of artificial scarcity, such as the illegal drugs or diamonds.

None of the products represent large markets, due to their prohibitive price or relative scarcity. As a result, they are subject to substantial price elasticity depending on supply. For example, the global annual market for Helium-3 is about $10m. Double the supply, halve the price, and the net revenue is still about the same. No-one seriously thinks that Lunar mining infrastructure can be built for less than many billions of dollars, so even at a price of $100,000/kg, annual demand needs to exceed hundreds of tons to ensure adequate revenue and price stability.

Tritium, helium-3, platinum and antimatter represent speculative future markets, particularly where increased supply could help develop an industry based on, say, fusion, exotic batteries, or a bunch of gamma rays. If fusion-induced demand for helium-3 reaches a point where annual demand has climbed by three orders of magnitude, then I am willing to revisit this point. But current construction rates of cryogenically cooled bolometers are not adequate to fund Lunar mine development, and solar PV electricity production has every indication of destroying competing generation methods, including fusion.

Some relatively expensive minerals are only expensive because low levels of industrial demand have failed to develop efficient supply chains. If demand increases, new refining mechanisms are invariably developed which substantially lower the price. A salient example here is rare platinum group metals.

In summary, the Moon seems to have nothing that large numbers of humans are willing to part with large sums of cash to obtain.

This is a recognized problem in science fiction, usually solved by the discovery of some otherwise non-existent and commercially crucial material. For example, in James Cameron’s film “Avatar”, the moon Pandora was a source of “unobtanium”, a room temperature superconductor that justified the enormous expense of mining it. In Cordwainer Smith’s novel “Norstrilia”, giant mutant sheep produce “stroon”, a medicine that provides longevity. In “Dune”, the crucial mineral is “spice”, a powerful drug.

The elixir of life is something that no shortage of people would pay arbitrary prices to obtain. Alternatively, while extremely unlikely, it may be discovered that living in Lunar gravity extends lifespan. If something like this exists, then I think there is a clear business case to be made for the industrialization of space. Without it, I don’t believe that mining the Moon for rocks and metals makes economic sense.

As a final note, while I think there are exactly zero hard-nosed mining executives who believe there are trillions to be made mining asteroids or the Moon, I don’t think this means that humans can’t live and work in space. The faulty assumption is that the activity needs to make lots of money, throughout the process. While a lowered profit motive changes the nature of the game in all kinds of ways, it doesn’t rule out progress, which could be driven by philanthropy or strategic imperatives.

In a future post I’ll explore the “why” of humans exploring space, but for now just remember that if no-one can make money mining the moon, no-one is going to do much of it.