INN chatted with Jeff Plate of consultancy Watts, Griffis and McOuat about the mining industry’s future potential in space.
In 1994, the internet was still very, very new to consumers, with text-based search engines only just starting to emerge as a way to index and categorize information.
Twenty-five years later, the internet is everywhere, permeating the world’s economy, political systems, education services, social networks and of course, communications systems, in ways that would have been impossible to imagine in 1994.
According to Jeff Plate of Watts, Griffis and McOuat (WGM), a Toronto-based mining consultancy, trying to predict the future of mining resources in space in 2019 is just as challenging as trying to predict the future of the internet would have been in 1994.
“We’re at almost a similar stage of development with respect to the commercial development of space.”
Speaking with the Investing News Network (INN) about WGM’s “Conceptual Economic Study for Lunar Water Mining,” released in August, Plate explained that developments in technology and the commercialization of space means that there is an opening for private interests to profit from a frontier that has so far been the domain of governments and their military and research branches.
Plate said that in situ resource utilization — or ISRU (mining resources used in space in space) — is NASA’s preferred model for supporting human exploration in space.
He added that while NASA and other similar agencies like the European Space Agency and Japan Aerospace Exploration Agency might want to stick with ISRU to meet their exploration and development goals, they don’t have the time or budget to devote their attention to an area that could be filled by private interests.
Enter companies like SpaceX, Virgin Galactic and Blue Origin — companies that have made the commercialization of space their goal.
“They’ve been able to basically prove that they can do it far faster, far cheaper and far more efficiently than NASA ever could — or any other space agency,” said Plate. “And they’ve driven down launch costs to about a 10th of what they once were and they’re continuing to go down.”
One of the biggest costs when it comes to space technology, or anything to do with space, is getting materials off Earth — as proven by the size of the rockets used by space agencies around the world to deliver relatively small payloads. Getting things back? Not so much, given you just have to drop whatever you want from space (as long as it doesn’t land on anything important).
But Plate’s not interested in bringing things back (yet), with the WGM study he authored being all about developing an industry in space to support extraterrestrial human exploration.
Plate said that the combination of the commercialization of rocketry and aviation technology in space, as well as the proliferation of off-the-shelf satellite technology means that there are more satellites in space — and there is more interest in the development of the area.
Water is a primary component in micro-satellite propulsion technology, and the confirmation that there is water on Earth’s moon means that all those agencies, universities and private companies with satellites orbiting the planet are taking a close look at how to mine that resource.
“So there’s great commercial interest within the satellite community and definitely the military community, in particular, to be able to have refueling capability,” said Plate.
Enter WGM’s conceptual economic model for mining water on the moon. The study envisages a US$206 billion market for water in space over the next 30 years — a number which Plate said is conservative, but the only number out there so far.
“If we look at any mining rush, in any new area that’s been exploited for mineral resources on the planet, usually the first people in make all the money and there’d be extraordinary profits. Then once it refines, everyone piles in, and then you get a mining boom and then a bust and then it normalizes. I suspect you’ll see a similar development cycle within lunar mining, but it’s very early days stuff.”
The title of his study backs the early days idea: it’s all conceptual.
Who is likely to be pushing forward with ideas around the mining of the moon — or indeed mining anything not on planet Earth — is surprising though. Hint: It’s not the mining industry.
“Mining has largely been completely absent from this,” said Plate, explaining that the industry appears to have enough on its plate in terms of risk management and the ups and downs of Earth’s economy.
Interestingly, he said that in research for the study, he found that the industries and sectors that would need to come together to get an operational mine in space going basically never talk to each other.
“One of the ‘ahas’ I had in dealing with this is that you’re dealing across multiple lines and multiple industries and businesses that are very siloed.
“For example, the aerospace industry doesn’t generally cross paths ever with the mining industry. And nor do either of them necessarily cross paths with the nuclear industry, which touches on this, or the agricultural industry or the communications industry,” he said.
“(Communications) deals with the aerospace guys, but they don’t really talk to the miners ever. So the thing is, is that there are natural linkages within it.”
Where there aren’t natural links is in scale, said Plate, as shipping big pieces of equipment isn’t viable.
“Stuff in space is going to be very small — almost tinker toys small. We’re used to operating huge open-pit mines here on Earth, whereas we’re digging swimming pools on the moon, relatively speaking.”
Another big difference is the environment — but the harshness of the environment reveals a link to today’s mining world in autonomous technology.
“The truth is that if you’re going to do anything in space, you don’t send people because that’s very risky, it’s expensive, it’s dangerous. You want to run all of this with robotics and you want to run it remotely.”
So far, autonomous technology on Earth is mainly centered around transport links and moving ores around — mining giants like Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) operate autonomous rail systems, while Vale (NYSE:VALE) uses human-free trucks to move ore around at its Brucutu mine in Brazil.
Despite the linkages between the industries, Plate said that the space mining industry isn’t a playground of terrestrial miners, but bootstrap companies.
“This will typically be exploited by non-mining entities who are drawn from the venture capital community, from the technology community. Others who are willing to expend risk capital because they see the potential opportunity in this.”
He said that there are organizations out there willing to sign contracts right now with companies that are able to prove they can viably mine water on the moon — so this is all very real in 2019.
“If you can credibly produce water, which is the basic input material to be able to use to make propellant, they’re willing to buy it right now and to sign agreements today — if you can credibly demonstrate that you have both the capacity and the funding to actually make it happen within the timelines that you need. And those timelines, you know, there are going to be landers on the moon starting in, I think 2022, that will potentially need to be refueled — that’s three years from now.”
Where to for now?
In 2020, the Prospectors & Developers Association of Canada convention will include a space mining technical session — its first ever.
“There will be a great deal of interest in the topic for a number of reasons,” said Plate.
“First of all, it’s novel. No one’s ever really kind of looked at this solidly, so we’ve got a good, solid agenda planned for that one. Two, the global media and other players will be there; and three, the topic is just sexy as hell.” So watch this space.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.