19 thoughts on “When Commodities Analysts Should Stick To Commodities”

  1. I wonder what they do at Barclays? It can’t have anything to do with business, because they suck at it. You’d think a financial services bank would have analysts that had a clue.

    I always seem to screw up the magnitudes (but that doesn’t stop me) so here we go…

    Can’t imagine how 50b kg (20% of 250b) of water could be of use to anyone? What would the replacement cost be using a FH? A single flight would be less than 48k kg. That’s about a million flights at $100m per. so $100E18 whatever that is.

    Another way to look at it is if it takes 10 refueling flights to a general purpose spaceship in LEO for a mars mission… That’s millions of mars missions that save a billion dollars per mission.

    From just one rock.

  2. Say Donald Trump flies to Thailand in his personal jet, stays with his staff in a posh hotel and a visits a resort where he steps in some cow dung, and then flies back to New York. Barclays can figure up all his costs, the amount of dung still sticking to his shoe, and determine the market price of bullshit.

  3. Maybe there are well thought out ideas for how to do this, but as I have not done any study on it previously, I have to say prima facie that both analysis appear absurdly pessimistic and optimistic, respectively.

    How would the spacecraft “grapple” the asteroid? How would it even sense where it is, relatively speaking, to grab hold of it? And, how do we get it down to Earth without burning up?

    1. And, how do we get it down to Earth without burning up?

      You don’t bring it back to Earth. You bring it to Lunar orbit. There it is mined and processed, extracting water and platinum-group metals for starters. The water stays in space, to either be further processed into LH2 and LOX for rocket fuel or just used as water.

      The platinum-group metals could be brought back to Earth if you want, stored as bars in a cargo return vessel such as Dragon.

  4. They can’t seriously be that *^&%*%* stupid, can they?

    Let’s suppose that article was written for ‘goods’ brought back from The New World, 500 years ago. I’m guessing Barclays would have been against the entire Colonizing of said New World?

    “It’s just to too, too expensive to get stuff from there, back here to stuffy old England where it will do us any good!”

  5. I don’t think we can take either FH or its projected cost/kg for granted. And you would still have to bring the platinum back to earth.

    Dragon allows you to return 3mT for $120M, so $40M/mT. With refined gold floating in orbit you would about break even. If launch costs are reduced by an order of magnitude it would be profitable. But how much of the asteroid is going to be valuable metal and how much of it rock? If it’s 10%, then you’re back to being barely profitable. And that doesn’t even include development of all the mining equipment, none of which exists today.

    I’m much more optimistic about the commercial viability of asteroid mining for propellant or extraterrestrial construction materials, but those applications would depend on NASA acting reasonably (which seems a political rather than a mere technical challenge) or on availability of cheap lift, which will no doubt happen eventually but may take a long time in the absence of resonable behaviour by NASA.

    1. I was under the impression that using the material from the asteroid to build space based infrastructure was exactly what they (Planetary Resources) had in mind. The logic being it is cheaper (well easier anyway) to move a small asteroid than lift the same mass to where you need it. Is Planetary Resources trying to sell this as a gold (or platinum) mining venture?

    2. The Dragon heat shield mass is probably 10 to 15% of the total weight of the return capsule, and you could use platinum as the structure to which the PICA sections are mounted. Given a Dragon dry mass of about 4000 kg and a payload of 3000 kg, and allowing 1000 kg for heat shield, parachutes, and other essentials, one Falcon launch should be able to deliver 7 or so specialized return modules, each able to hold about 6,000 kg of platinum.

      So you should return 40 MT per $120 million launch, or about $3 million a ton, $1360 a pound, or $93 a troy ounce. This could easily be improved by a factor of two or three because you don’t care how many G’s the platinum pulls on re-entry (short of burning up) or how hard it hits the water, as long as the product is recoverable or salvagable.

      1. Platinum is sufficiently refractory that I’m not sure it’ll need a heat shield, just a guidance package to make sure it impacts in the right place. If a heat shield is needed, I’d look at silica fiber.

      2. I think that might work. You could perhaps fashion the platinum into a hollow ball (because platinum is very, very dense) and not use any reentry guidance system at all. A sphere isn’t going to have any crossrange or downrange drift, other than a tiny bit from the wind, and the retro package could just slow it down enough to drop out of orbit, detach, reaccelerate, and thus be fully reusable (with occassional refueling). If the ball is light enough to float and can survive an impact with the ocean at its sea-level terminal velocity, it wouldn’t even need a parachute.

      1. In other words, this pretty much gives us mars even before the Falcons become reusable. But then, I don’t really want to wait the ten years it will take to get the first asteroid orbiting the moon. We need to spend that time researching ISRU on mars.

        Looking for life on mars is putting the cart before the horse BTW. First get lots of people there so many of them can do exploration and science. This is the great thing about putting an asteroid in orbit. I expect they will allow others to use it for learning how to exploit asteroids after we’ve got one. This would lower the risk of govt. trying to step in and take over (I know, control freaks will be control freaks.)

  6. One thing to consider about flooding the market is that the market doesn’t need to be flooded. Just like diamonds, metals can be stockpiled.

  8. How representative is platinum concentration 1.4 PPM from this? That’s about 10 million ounces of platinum from your reference asteroid, or $16B at today’s prices. I’m confident there’s a business plan out there that can set up a smelter in orbit, but not having seen one, I’m worried it might contain a missing factor of 1000 here or there.

    1. I think the telescope fleet and probe fleet that Planetary Resources is considering are designed to find and characterize the majority of the Near Earth Asteroids. Orbital observation coupled with ground-truth calibration of a few asteroids should enable surface characterization of a large number of asteroids through passive observation alone. That should eventually answer your question about how representative that meteorite is.

  9. about 300 meters in diameter, with a volume of over a hundred million cubic meters

    Am I correct?…

    4.2*150^3 = 14,175,000 m^3 assuming it’s roughly spherical. I’m referencing your article in a comment over at space review and want to get the numbers right.

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