As Earth cooled during the early phase of its formation, most heavy substances — including valuable ones like gold — sank toward its core, making them inaccessible.

As a result, mineral extraction is now beginning to explore a new frontier: space.

Luxembourg has announced plans to pioneer the potentially lucrative business of mining asteroids in space for gold, platinum and tungsten.

The Government said it planned to create a legal framework for exploiting resources beyond Earth's atmosphere, and said it welcomed private investors and other nations.

With a well-established satellite industry, Luxembourg is the first country in Europe to stake out rights for the mining of so-called "near-Earth objects," according to officials.

In a similar move last November, US President Barack Obama signed the Commercial Space Launch Competitiveness Act, giving US companies property rights over space resources they retrieve.

"Luxembourg also wants to set up a regulatory and legal framework in preparation of the exploitation of space," Jean-Jacques Dordain, former head of the European Space Agency and an adviser to Luxembourg, said.

"Our aim is to open access to a wealth of previously unexplored mineral resources on lifeless rocks hurtling through space, without damaging natural habitats," Luxembourg's Economy Minister Etienne Schneider said in a statement.

Two US-based companies, Deep Space Industries and Planetary Resources, have bet heavily on a future market for metals from space.

Both applauded the Luxembourg announcement and were identified as potential partners.

A large number of asteroids are clustered in a belt between Mars and Jupiter. ( Supplied: SpaceResources.lu Initiative )

Space mining could make economic sense

Looking for precious elements on asteroids tens of millions of kilometres from Earth makes more economic sense than may be apparent at first glance.

Over the past few centuries, what precious substances did remain close to the surface have been heavily mined, including an increasingly wide range of rare metals used in the electronics and defence industries.

A large number of asteroids — which vary in size from a couple of hundred kilometres across to a few metres — are clustered in a belt between Mars and Jupiter, and orbit the Sun in the same way as planets.

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Indeed, they are thought to be the remnants of a planet that fractured into pieces, perhaps due to a collision.

As a result, the same minerals pulled by gravity towards the centre of Earth are more plentiful and accessible on these free-floating fragments.

NASA has identified some 1,500 asteroids that it has described as easily accessible.

Rapid advances in technology and robotics have brought a space-based, industrial-scale operation into the realm of feasibility, experts say.

Deep Space Industries envisions a four-step process: prospecting, harvesting, processing and manufacturing.

Tiny space probes would search for iron ore, rare-earth metals and silicates. Some would be brought back to Earth, while others would become raw material for manufacturing in space using 3D printers.

The probes would also look for water — normally abundant on asteroids — to be broken down into oxygen and hydrogen, and used to fuel satellites and rockets.

Legal questions remain over ownership of resources

However, whether private companies or nations are legally entitled to mine in space is still a bit of a murky topic.

Steven Freeland, a professor of international law at Western Sydney University, said there was an intentional regime backed up by a number of United Nations-sponsored treaties.

"The first of which was in 1967 [and] generally provides that out-of-space and celestial bodies can't be appropriated by any country, and by extension by individuals, which means there's no claim of sovereignty over asteroids or the moon," Professor Freeland said.

"It's not entirely clear whether that international regime extends to not being able to claim the resources that are extracted from these celestial bodies."

Professor Freeland said he anticipated international leaders would have to gather and clarify the space mining situation in the not-too-distant future.

"The trend is such that, at some point, that's unavoidable, and I think that's a good thing because this is such [a] major impact in terms of the way we view out-of-space and the way we view the future of humanity and all those really broad issues," he said.

"I think it's really important that we have an appropriate dialogue to coordinate all of this."

AFP/ABC