Business, Economics, History, Media Criticism, Space, Technology and Society

A Gold Asteroid

33 Comments

Will it make us rich?

Dennis Wingo responds:

Yes, it’s impossible to predict the effects of drops in the price of previously-rare commodities. Gold is a very useful industrial metal, and this would expand its usage.

33 thoughts on “A Gold Asteroid”

  2. Wow, the stupid is strong with that sub-headline. Gold is also very useful in medicine. More gold means greater availability of life enhancing products to more people. So either Bloomberg doesn’t care to help the poor have access to these products or doesn’t want to make life enhancing products. I’m thinking of embracing the power of AND, because I suspect the editors are Malthusian.

    1. Gold and platinum are highly useful, as are a range of other rare metals. Demand would go way up when they’re selling for the same price as copper or tin. Gold would become ubiquitous for electrical connectors, even in wall outlets, and could also become a standard coating for plumbing.

      But we would also go through a dark period of excessive gold trim on cars.

      But I think the real prize is virtually unlimited amounts of energy that we can use to refine ores in unbelievable quantities, such that titanium-hulled fishing boats become common.

      1. “But we would also go through a dark period of excessive gold trim on cars.”

        You *are* aware gold is shiny and reflective, right?

        (this was a joke)

    2. Certain metals, that are rare on Earth on account of it gravitational gradient sequestering most of its endowment of such materials at its inner depths, are indeed abundant on that asteroid, or so it is speculated. Those metals wouldn’t be rare if you could drill most of the way to the Earth’s core where those metals are also abundant, but the cost would far exceed scratching around for the scarce ores in the Earth’s outer layers.

      One question is how much would it cost to extract platinum and other “rare metals” from the much more abundant iron on the asteroid? And then how much would it cost to bring it to Earth, or bring it to some other part of the Solar System that would realize an economic benefit to exceed this cost?

      I “get” that you cannot take $1000/ounce for platinum and multiply it by the putative mass of platinum on that asteroid and figure on every person on Earth having a net worth of 93 billion USD. But if the extraction and shipment cost of the asteroid platinum is $1000/ounce, it won’t really change much for us on Earth.

      If the cost can be less than that, or if the industrial benefit of cheap platinum, say, for making synthetic fuels and other substances can jump-start a virtuous cycle of making asteroid platinum ever cheaper, the economic benefit is only limited by one’s imagination, a mental quality that I admit the author of the article has in short supply.

      1. I think I once calculated, based on elemental abundance estimates for the core, that the Earth should have enough gold to coat the entire surface of the planet in a layer about 6 inches deep. But we can’t get it.

        However this does raise important questions about potentially accessible reserves on the Moon and whether Mercury is solid all the way down. If it is, the asteroids might be a rather trivial source in the long term.

        1. The energy required to go to Mercury is huge and the planet has a pretty substantial gravity well, making anything harvested from there difficult to return to the Earth. It’s far easier to go to the moon and its gravity well is much less, but there is still a cost to return lunar materials to the Earth. Reaching the asteroids takes more energy than the moon but they essentially have no gravity well. Being much smaller, it’s likely easier to mine an asteroid than the moon.

          The biggest potential market for space materials is likely in space itself. I’ve read Bezos is a believer in Gerard O’Neil’s space colonies using gigantic cylinders idea. Building those colonies will quite huge amounts of materials, something that you could never supply from Earth. Some of those materials could come from the moon and others from asteroids. They’re finding useful things in both places. It likely would be a long time before you could harvest materials on the moon, Mars, or an asteroid and return them to Earth cheaper than you could obtain them through conventional means.

  3. If there there was 100 tons of lunar dirt on Earth, and you could buy it, how much would 1 kg {or 1/1000th, 1 gram} be worth.
    It’s possible there is 100 tons of lunar material on Earth already.
    There are tons, do you know if less or more than 100 tons? I don’t.
    I know 1 kg of any kind of material which came from the Moon [by falling out of the sky} would cost a fair amount money.
    And I know if you take 100 tons of lunar material from the Moon and bring it to Earth, it would worth more than a moon rock falling on Earth- unless the circumstance of rock falling to earth killed Hitler or Micheal Jackson. Because the event associated with rock falling on Earth, might be more valuable than whatever rock was made of. Similarly lunar material taken from the Moon will have some of value related to the “event” of taking it from the Moon. Or the first 100 ton or first 10 tons of lunar material brought to Earth and who did it.
    And “events” can be created. So the 100 tons of lunar material might have 10 tons of it sold as in gram quantities {10,000,000 grams} and
    Have the 1 gram worth $50, and with “baseball card attached it” selling for $75. So any want the lunar card, which has limited number of 10 million cards? Of first private venture bring lunar material to Earth?
    I think they sell like expensive lottery ticket. And would you “worry” that only 5 million were sold in US and 5 million sold in the rest of world?
    I think it would sell out within a day.
    Now if that “event” happened {and had the event occurring on the moon of getting the material and getting back to Earth} how much is rest of 90 tons of lunar material worth? And assume it’s not completely uniform, maybe 10% is “interesting pieces in some fashion or another”- like jewelry or decorative type stuff- or unusual, scientifically speaking- orange beads or whatever.
    Schools have mineral samples, how many school want a lunar sample as part of Earth rock collection.
    I think there would be a shortage of the 90 tons of lunar dirt, which was sold for more than price of gold.
    And doing this might be a business, but it’s a sideshow of lunar water mining business and many other lunar business. And 1/2 dozen space agencies might involved in having lunar bases {which probably have variety different scientific and non scientific focuses}. And etc.

    Or if you have lunar rocket fuel, then the Moon become destination- if don’t it’s not, but become destination because it a lot cheaper to go the Moon. And much cheaper getting stuff off the Moon {and returning to Earth]. Or India wouldn’t try to land on the Moon, they would landing and then leaving the Moon. Or if left anything on the Moon- someone might want to buy, whatever they left. Though things already left, will probably be park areas on the Moon- few people want Apollo site material sold as scrap or Earth collectible items.

  4. If they started extracting/transporting to Earth the asteroid’s Gold/Platinum prices might initially “crash” but recover; remember practically you couldn’t really initially transport very much of that main sequence asteroid Psyche 16’s gold/platinum to the market very quickly. Eventually the market would figure that out and price would recover (somewhat). Longer term the price of said gold/platinum couldn’t sustainably drop to below the extraction/transportation cost from the asteroid. If it did mining/transportation would slow to a crawl until the price went back up (or extraction/transportation cost went down). If for instance it cost $1000/oz to mine/process/transport the metal to earth & the market price dropped to $900/oz; importation from the asteroid would effectively cease. Until either the price recovered to >$1000/oz or extraction/transportation cost dropped to much less than $1000/oz. The free market is a remarkable tool for finding the true value of something

  5. It’s unlikely to make us richer to the degree that the printing press did, or the steam engine did, or the computer revolution has. I don’t think Bloomberg is claiming that there would be no economic benefits, just that each person having ten thousand ounces of gold isn’t going to make everyone worth $20,000,000.

    2. just that each person having ten thousand ounces of gold isn’t going to make everyone worth $20,000,000.

      If only others could realize this flaw in the socialist doctrine.

    3. What enabled the steam engine was Bessemer steel; what enabled the computer revolution was ultra-pure silicon.

      Who knows what materials tech will be enabled by abundant nickel, platinum and perhaps even cobalt?

      1. The steam engine was invented before Bessemer learned how to make high quality steel in large volumes, but it was that steel which revolutionized the building of steam engines, railroads, buildings, and so many other things. Before Bessemer steel, most things were built using iron which was greatly inferior.

          1. Indeed they did build computers using vacuum tubes. I was discussing that with my brother yesterday. I own an iPad with a few GB of RAM and 128 GB of storage. Take that tablet’s CPU speed, memory, and storage and compare it to earlier computers and you’ll find the iPad is as powerful as all of the computers on Earth put together up until some point in the late 1960s or perhaps well into the 1970s. My brother joined the Navy in 1970 and worked on an aircraft simulator that was driven by a mainframe computer. That computer used magnetic core memory for a whopping 32 kilobytes of storage and cost over a million dollars. It was solid state. If you tried to build an iPad equivalent with vacuum tube technology, it’d likely be the size of several city blocks and would need a dedicated power plant (a big one) to power the billions of tubes and to keep things from melting.

      2. So you agree with the article, as do I, what’s your point, other than to repeat points others have already made?
        It’s because wealth mostly doesn’t come from big hunks of metal. It comes from the ability to create things that satisfy human desires.

        1. Human greed is a desire. So, yup.

          But human greed and desires also destroys wealth {obviously}.
          So, probably better to say, wealth comes from competition.
          And don’t have competition without desire.
          So, perhaps females are large part of why we have wealth.
          Or if you have a sexless animal, do you get wealth?

          Or how about, no children- do you get wealth?
          China and Europe are running the experiment, and we should get the results, fairly quickly.

          And I would suspect, respect for elders, also plays a role- so, Asia might be better off than Europe.

  6. Gold is very soft and has a relatively low melting point that keeps it from being very useful industrially. Its best use is alloyed with cobalt and plated a few microns thick over harder metals in contacts. While gold is hardly cheap, the actual cost of the gold in plated contacts is trivial. Solid gold would be less conductive and too soft to use.

    Platinum on the other hand is very useful. Its high melting point combine with very good chemical resistance and strength. Right now, it costs about half of what gold costs. If the price were $3-5 a pound instead of $500-600 an ounce, it would open up a lot of uses.

    Platinum is usually found with, and alloyed with, gold, silver, copper and zinc on earth, I don’t know if the same would be true of asteroids.

    Of course, there are many tons of all of these in a cubic mile of sea water, just no economic way to extract it.

  7. I have told people that we can mine asteroids for precious metals endeavoring to pay off our nasty national debt. And I have gotten grief from those who say that if we flood the world with so many trillions of dollars of gold, the value will fall. My response is that we call up bond holders. “Hey, we’re paying off our debt to you with this pile of gold. You don’t want it you say? Ok, we’re paying off our debt with this big stack of prettily printer paper. Your choice.” If anyone has better solutions, let us hear them.

  8. An asteroid full of bitcoin and butt plugs would be valuable, even Dennis and Dr. Dildopolis Zubrin can agree on that one. Cool cat is out of sight!

    1. The Kurds will perhaps nominate Trump for the Nobel Peace Prize for flipping the entire civil war on its head with just a phone call and a few Tweets. Now they’re allied with the Syrian government (effectively with the Gulf Cooperation Council) and the war is basically in its end stage, with the vast majority of Syria fighting on the same side against jihadist remnants and the Turkish-sponsored rebel militias, who just got overextended in their rush to claim the strip of northern Syria.

      Erdogan, never much of an ally, just slammed his hand in the door and now he’s isolated and trying to invade a newly unified country against world opinion, including that of the US, Russia, Europe, and the Middle East. So he’s suddenly desperate for a negotiated settlement and nobody is in the mood to grant him a single thing.

    3. George Turner
      October 1, 2014 At 10:10 AM
      The overarching foreign policy of the Obama Administration is to leave no back unstabbed, no ally uninsulted.

      I think George would find many more in agreement if he said that about Trump.

  11. It is not like there are no costs associated with asteroid mining, processing, and shipping. And anyone who goes through the effort is surely smart enough to not flood the market in such a way that it lowers their return.

    You would also see different prices for different markets, assuming there were other markets.

    1. And anyone who goes through the effort is surely smart enough to not flood the market in such a way that it lowers their return.

      If they chose not to flood the market and they’re not a protected monopoly other players would quickly enter the asteroid mining business, flooding the market.

  13. I mine gold for a living. I would change careers when an asteroid of gold appeared on the market. Deadwood: “Panic’s easier on the back than the short-handled shovel”

    1. If earth stopping mining gold, what does it mean in terms global energy costs.
      I don’t think its a lot. But China is using a lot energy and China is mining a lot gold. I don’t think they directly connected, but I think there might be some vague connection.

      I generally suppose that when mining gold, you mining other metals and money from the gold is kind of bonus. So one could be mostly mining iron and also get gold {the only mine I ever visited did this}
      but it seems one might choose to mine iron where one also get higher concentration of gold. Or there could be a better place to mine iron, but choose sites where you also get gold {and/or other metals]. Or it costs more to mine the iron, but you also getting gold so it’s worth mining the iron.
      Or it’s seems like a quite complicated question regarding the energy costs of mining gold.

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