Maybe you’ve read the wild stories about the US companies aiming to mine in space. But most people have paid less attention to the country aiming to be the US’s commercial competitor: Luxembourg.

In February, Luxembourg’s government announced their intentions to build regulatory framework around asteroid mining. In May, the government announced their partnership with private US asteroid mining company Deep Space Industries (DSI). On June 3rd, the announcement came that Luxembourg would be setting aside 200 million euros of government funding toward asteroid-mining projects within their borders. So far, the country has lured both DSI and their American competitor, Planetary Resources, into opening subsidiaries within Luxembourg. Elon Musk’s SpaceX is also reportedly in talks to open a branch in the country, according to Space News.

Why is Luxembourg racing to become a leader in space mining? On a map, Luxembourg is a European freckle. The country is little more than 2,500 square km in area — about the size of Rhode Island. It has the second-smallest population of any European Union nation, and with a total population of roughly 570,000, Luxembourg would be America’s 32nd-largest city.

Luxembourg is the speck, not the box (CIA World Factbook)

So why is this small country racing to become a leader in space mining?

Actually, Luxembourg’s space industry started in 1985 when the private satellite operator SES was founded (they are still located in the country today). Now, SES is the world’s largest satellite operator. They own and operate more than 50 satellites in orbit that can reach 99 percent of the world’s population.

"They get it." According to DSI CEO Daniel Faber, SES is a large factor in why Luxembourg is ready to invest in DSI and asteroid mining. Satellite companies account for more than 50 percent of the space industry, he says. "[Luxembourg has] the largest company in the largest sector of the space industry already based here," he tells The Verge. "They get it. It’s in their psyche here that this is something you can make money off and this is something that you can grow."

With the 200 million euro fund, Luxembourg is setting itself up to be a hub for space entrepreneurs. "It’s not like we have to go and join the NASA system or the ESA system," Faber says. "Here we’re free to be a company and encouraged to be a commercial company and go after a profit maybe." In the government’s press release on Friday, former NASA researcher Pete Worden described Luxembourg as the "Silicon Valley for space resources."

DSI, based in Silicon Valley, will be working with Luxembourg to develop Prospector X, a spacecraft that will fly in low-Earth orbit and test the technologies that will be used in the company’s future space-mining missions. This is the first step in a series of missions that DSI believes will lead to successfully mining asteroids.

This summer, DSI plans to open their subsidiary in Luxembourg. They will be working with the University of Luxembourg to develop technology for Prospector X and will be putting together a "Centre of Excellence" at the university to "help develop programs that will create asteroid geologists and asteroid-mining technical experts," according to DSI spokeswoman Meagan Crawford.

People in the space-mining business believe that now is the time for investors to join in on their ventures. They believe their business models are feasible, and they’re looking to court investors now because it will be too late to enter the market by the time physical results are returned.

"Rotating cities in Earth's orbit" Eventually, Earth’s resources will begin to run dry and companies like DSI believe that the 50,000 or so near-Earth asteroids have enough materials to support hundreds of billions of people. The materials that are contained in these asteroids will be the basis for a future space economy that Faber envisions. An asteroid in orbit has never been mined, but DSI believes that by the end of the decade they will be on a mission that will pave the way.

"In 30 years’ time we’re going to be taking orders from real estate developers who want to build rotating cities in Earth’s orbit," Faber says. "Everything you can imagine you need on Earth that doesn’t use very sophisticated manufacturing processes, we’ll be doing that in space."

As Faber imagines it, these cities will house a few thousand people, and most of the materials will be supplied from space mining — from sheet metals to 3D printer feedstock. "You bring the silicon chips from Earth, you bring the sort of high-cost stuff, then we marry that with all the material coming from our materials depot, which has come from the asteroid and been processed," he says. Those materials can be brought to space construction sites, to build and launch the orbiting cities. "What we’re effectively building is the skyscrapers on orbit, with the parks and recreation facilities and sports and everything else built in."

The first space resource anyone's interested in? Water As cool as these space cities sound, they will — at best — come in the distant future. "I think the general idea, I think it’s possible, but it’s a question of time," says Holger Voos, a professor of automatic control and automation at the University of Luxembourg. "The first resource that a lot of these companies are targeting is water in space."

Voos is right: the earliest resource that DSI and other companies plan to mine from asteroids will be water. (NASA is also studying mining water — but from the Moon.) Water’s valuable because it can be made into fuel that would allow spacecraft and satellites to refuel in orbit. If water is successfully extracted and stored from an asteroid, then fuelling stations would likely be built in space, according to DSI.

This advancement could especially benefit SES. If the company could refuel their growing number of satellites in space instead of having to bring them down from orbit and relaunch them, it could save billions of dollars.

But even this technology is years away. In the immediate future, these investments could continue to grow and exhibit Luxembourg’s technology and education. Eventually, the country hopes that these investments will help them become a "European hub for the exploration and use of space resources," as Deputy Prime Minister Etienne Schneider said during Friday’s announcement.

And there still is more regulatory work to be done. The US has passed legislation guaranteeing that US companies can keep what they mine in space. Luxembourg hasn’t — though they intend to pass something similar. Prime Minister Xavier Bettel says he expects it to pass by next year, according to Space Policy Online.

Thinking about our future in space can make you feel kind of small. But then, Luxembourg is used to that.