Find Research
Our World View
Industry Perspectives
Research Program
Parallax View Magazine
> stay tuned
View our collections of research around key subject areas:
>
>
>
>
>
ERP
>
>
>
>
>
>
>
SRM
>
>
WMS
 
 
Article
Space-Based Manufacturing and Logistics—Part Three: Mining and Logistics

In this final article of the series, we discuss current activities and future potential in space-based mining, as well as the various kinds of logistics that will be required for the emerging, diverse, space economy.


Full Article Below -
Untitled Document

This is Part Three, the final installment of our three-part series on space-based manufacturing and logistics. In Part Two, we looked at specific examples of space-based manufacturing that are already being tested and pursued. Here in Part Three, we look at space-based mining as well as the logistics required to support the ever-growing space-based economy and its supply chains.

Space-based Mining

When talking about space-based mining and the resources that will be extracted from asteroids, the Moon, and Mars, it is useful to differentiate between those resources that will be returned for use on Earth vs. those resources that will be used on Mars or the Moon. Space mining will very likely be a requirement to sustain colonies on the moon and Mars. Particularly important will be mining for water, not only for drinking and agriculture, but potentially to be split into oxygen and hydrogen to make rocket propellant. Minerals such as iron, silicates, and carbon dioxide will likely be mined on Mars to build out infrastructure and for extracting oxygen. In 2020, NASA awarded contracts to four companies to mine small quantities of regolith from the Moon, as part of the Artemis program.


The Ambiguous Status of International Law for Space Mining

Space mining is subject to some uncertainty regarding the legal status of ownership of space-based resources. The 1967 Outer Space Treaty1 has been signed by the United States and 104 other countries. It provides a basic framework for international space law. Regarding extraterrestrial mining rights, the treaty is ambiguous. One of its principles states, “outer space shall be free for exploration and use by all States.” Another potentially conflicting principle says, “outer space is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.” Some say this creates uncertainty and/or are concerned that space resources will benefit only a few spacefaring nations. Others contend that extraterrestrial mining is illegal until a binding international regime is created and widely ratified.
The 1979 Moon Treaty2 has the stated objective "to provide the necessary legal principles for governing the behavior of states, international organizations, and individuals who explore celestial bodies other than Earth, as well as administration of the resources that exploration may yield." Though 18 states are parties to the treaty, it has not been ratified by any country that has launched their own manned spaceflights.
In 2015, Congress passed the US Commercial Space Launch Competitiveness Act (CSLCA), part of which grants U.S. companies the legal right to use resources acquired in space.
The Artemis Accords are a multi-lateral agreement between countries participating in the Artemis Program, the U.S.-led initiative to return humans to the Moon this decade. The Artemis Accords express the intent to contribute to multilateral development of international practices and rules on extraction and use of space resources. Russia and China are working on a competing proposal, the Chinese International Lunar Research Station concept, which they hope other countries will join.


Regarding mining for Earth-bound ore, either from asteroids, or from the Moon or Mars, the cost equation is daunting. We already have returned samples of regolith from the moon and material from asteroids, but only in the tiniest of quantities, almost exclusively for scientific purposes. NASA’s OSIRIS-Rex mission, which rendezvoused with 101955 Bennu (a carbonaceous near-Earth asteroid) on December 3rd, 2018, is returning with about 1 kg of sample material from the asteroid. At a mission cost of $800M, that makes the cost of retrieving this ore more than $20M/ounce. There are asteroids with abundant minerals, in some cases exceeding the entire known reserves on earth, including high value minerals such as platinum. So, there still may be a commercial case for asteroid mining, but it will take very deep pockets and long timeframes (decades) to realize. Some concerns have been raised about the impact to Earth-based mining economies if asteroid mining is successful.3

Possibly even more speculative is the mining of lunar helium-3. The equatorial regions of the Moon are rich in deposits of helium-3 (a light stable isotope of helium). Helium-3 is a potential fuel for second- and third-generation fusion reactors, which may come into service in the latter part of this century. While there is a tremendous amount of current investment in fusion reactors, we are still decades away from large deployments of that type of energy generation, making helium-3 mining on the moon something that will not be needed until many decades from now.

A Diverse and Rapidly Growing Space Economy

The space economy is expected to continually expand in scope and size. Morgan Stanley estimates that the global space industry could grow from $350B in 2016 to over $1T by 2040. The majority of this is satellite-based services, such as satellite TV, internet, and the equipment needed to support those services. Space-based manufacturing and logistics will grow more quickly, but from a near-zero starting point, so that it will continue to be a fraction of the total space economy until at least mid-century and likely beyond.

Source: Morgan Stanley Research Note—Space: Investing in the Final Frontier

Figure 1 - Morgan Stanley Projections of Market Size for Satellite and Non-Satellite Services

The Business in Space Growth Network (BSGN) was created by the European Space Agency (ESA) to help “make use of space exploration infrastructure to offer unique commercial services and enable the development of new products for use on Earth and in Space.”4 Private investors provided nearly $15B to space-related companies in 2021, up from $10B in 2020 and $6B in 2019.5 Momentum for investing in the space economy is growing and should continue to expand.

“For large version of this image, click here.”                                            Source: Factories in Space: In-Space Manufacturing & Space Economy

Figure 2 - Potential Elements of Future Space Economy

Logistics for the Space Economy

The space economy includes things like satellite-based services (telecoms, navigation services, internet, T.V., imagery, etc.), research stations, space-based manufacturing, space tourism, and perhaps potentially the largest of all, missions to the Moon and Mars, particularly if they ultimately lead to the creation of expanding colonies and extraterrestrial economies. All of these different sectors require logistics and supply chains providing transportation, inventory and storage, and service and repair. People, systems, materials, spare parts, supplies, structures, and waste need to be transported to and from Earth as well as to and from the Moon and Mars. As with Earth-based logistics, some of these will be multi-mode and multi-stage logistics, such as staging stations for Moon and Mars missions, as well as Moon- and Mars-based warehouses and ground transportation/delivery services.

Suborbital Delivery Services

There has been some funding towards development of suborbital delivery services for high value goods that need to get to other continents very rapidly. A suborbital flight can reach half the planet in under 30 minutes and any place on earth in under 45 minutes. One might ask who would be willing to pay $100 per kilogram for such a service?6 One answer is the U.S. military. Their Rocket Cargo program envisions the ability to deliver cargo via heavy lift suborbital rockets to anywhere on Earth, including locations lacking a spaceport or even a runway. They recently awarded $102M to SpaceX to demonstrate technology for point-to-point space-based cargo delivery. With the military as a lighthouse customer or anchor tenant, SpaceX (and/or their competitors) could begin to build out a worldwide service, perhaps in collaboration with a company willing to invest in a global network of spaceports. Such a network could eventually provide rapid transportation for people as well.

Launch Costs and The Future of Space-based Manufacturing and Logistics

As shown in Figure 3, LEO (low earth orbit) launch costs stayed somewhat constant (in today’s dollars) for decades, then started falling gradually in the late 1990s, with more accelerated drops in the 2010s. For the past decade, the price has been dropping almost as fast as Moore’s law drove continual order of magnitude reduction in semiconductor and technology costs. In contrast, the cost of other transportation modes, such as trucking, have been gradually rising for decades.

Figure 3 - Falling Cost of Various Technologies vs. Space Launch vs. Truck Transport

Will launch costs keep plummeting at these rates? That is a big unknown. It may not be as easy to sustain Moore’s law for launch costs as it was for semiconductors. SpaceX has lowered costs by making the rockets and vehicle components reusable, as well as other innovations. They claim to have the ability to reduce costs by at least another order of magnitude. Further in the future, space elevators or skyhooks could reduce cost by another order of magnitude (or two), largely by eliminating the need to carry fuel on the launch vehicle (about 85% of a modern rockets’ weight is fuel … only about 1%-5% is payload). However, space elevators are highly speculative right now, requiring materials stronger than any currently known to man. So, there is some possibility that the dramatic reductions in launch costs we have been seeing recently will stall in a decade or two … or even sooner.


On the other hand, as the space economy grows to a trillion dollars or more, it will provide the funding for more and more innovations, just as booming semiconductor-driven technology markets funded increasing investments in semiconductor production processes and equipment, which kept Moore’s law going, making markets even bigger in a virtuous cycle. Space-based manufacturing is not the only activity in space that will grow. Space-based research, tourism, mining, satellite-based services, and the colonization of the Moon and Mars will all drive growth in space logistics. Lunar and Martian colonies will require enormous amounts of materials, food, fuel, and subsequent transport capabilities. If space tourism becomes much more affordable and really takes off, those orbiting hotels will require regular resupplying. In fact, all of these space stations will require replenishment of materials and food, removal of waste, and service and repair of all that equipment up there.

Risks Exist

Of course,there are risks that might inhibit growth. Optimistic projections for continually lower launch costs could prove to be much harder to realize than some in the industry have predicted. Advancements in Earth-based manufacturing processes could make some of the space-based manufacturing advantages moot. The lack of international regulations for mining could lead to conflicts between nations. Military or legal conflicts in space and on the Moon and Mars might inhibit commercial developments. In a catastrophic scenario, increasingly crowded orbits, with more and more companies launching, might inadvertently lead to collisional cascading (aka the Kessler syndrome), making space activities and the use of satellites in specific orbital ranges extremely difficult for generations to come.

Interesting Times

In spite of these risks, investments continue to pour into the space economy. As the space economy expands, it will fund more and more R&D, bringing down launch costs and creating new space-based technologies and enterprises, creating this virtuous cycle. When semiconductors were first invented, it was difficult to predict exactly what the explosion of computing power would bring. In the same way, it is far too early to pick the winners and losers in space-based manufacturing, mining, and logistics.

The growth of the space economy will impact supply chains in many ways. It will provide ways to deliver goods rapidly to any part of the planet. Supply chain planning disciplines will expand to accommodate space-based logistics, inventory, and the consequences of remoteness (especially for Mars). It will also have to-be-determined impacts on societies. Just as with the development of any major new frontier for mankind, we will see the emergence of new communities, cultures, legal frameworks, technologies, social constructs, and social contracts. It will be interesting times.

_____________________________________________________________________

1 Aka the “Unite Nations Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies.” (Now you know why it is called the “Outer Space Treaty,” rather than by its acronym, UNTPGASEUOSIMAOCB). It includes a set of principles, such as “the exploration and use of outer space shall be carried out for the benefit and in the interests of all countries and shall be the province of all mankind;” and “States shall avoid harmful contamination of space and celestial bodies.” -- Return to article text above

2 Aka, The Agreement Governing the Activities of States on the Moon and Other Celestial Bodies. -- Return to article text above

3 Specifically, the concern is that if a space-mining industry develops so that high quantities of ore are being returned to Earth from asteroids, that type of mining would be done by space-faring countries, who by definition are already rich. This could further exacerbate inequalities by decimating the economies of developing countries that are currently highly dependent on income from mining operations in their own country and have no space program. -- Return to article text above

4 In this public-private partnership (PPP) initiative, the ESA BSGN has issued a “Call for Commercial Partnerships” and are offering to provide access to existing ESA-owned facilities on the ISS, scientific expertise, In-Kind contributions, and risk sharing. So far, they have received 75 proposals, signed four agreements with another 12 in the pipeline, for a total 75M€ of investments by partners. -- Return to article text above

5 Sources: Investors Poured Record $14.5 Billion Into Space Companies in 2021, and Update on Investment in Commercial Space Ventures -- Return to article text above

6 A similar skeptical reaction occurred when, in 1965, a Yale undergrad wrote a term paper proposing a transportation network that provided next-day delivery of time-sensitive shipments, such as medicine, spare parts, and legal documents. Some wondered how many people would pay for these services and speculated the market would be a niche service. The paper received only an average grade, but the student (Fred Smith) went on to found FedEx. -- Return to article text above


To view other articles from this issue of the brief, click here.




MarketViz powered.