Asteroid Mining Has a New Champion
Seemingly everyone is excited about asteroids these days. Earlier this year, analysts from Goldman Sachs Group Inc. told investors that the price of mining space rocks has never been cheaper. And the potential rewards are enormous: In 2023, a NASA probe will visit one asteroid containing an estimated $10,000 quadrillion worth of iron ore. So who among the world's spacefaring nations is ready to start extracting that value?
You probably didn't guess Luxembourg, the European banking hub with a population not much bigger than Albuquerque's. But on Aug. 1, a new law goes into effect there that could serve as a model for other small countries hoping to explore asteroids -- and to get a piece of the booming space business.
Luxembourg's interest in the field is longstanding. In 1985, its government was a major supporter of Europe's first private satellite operator, which eventually paid huge dividends: SES SA, as it's now known, is the biggest satellite operator in the world, and Luxembourg remains a major shareholder. As SES grew and prospered, it attracted other space and technology companies to the country, helping to bring much-needed diversity to its economy. Today, aerospace accounts for fully 1.8 percent of Luxembourg's gross domestic product.
That brings earthly advantages, too. Space companies have led to spinoffs in industries as diverse as environmental monitoring, materials science and information technology. Luxembourg's research institutes, scientists and engineers have all benefited from its unlikely reputation as a space hub, and gotten many more opportunities to collaborate internationally.
The government now hopes asteroids are the next frontier. Thanks to growing competition in the launch business, the price of putting a prospecting or mining mission into space has dropped considerably in recent years. Low-cost private missions to study asteroids -- and eventually mine them -- look increasingly feasible.
The only problem is that no one's entirely sure whether doing so is legal. Under the 1967 Outer Space Treaty, celestial bodies aren't subject to sovereignty claims by nation states, or by private entities under their jurisdiction. Whether companies can assert property rights over resources extracted from an asteroid has thus been an open question.
In 2015, the U.S. Congress sought to resolve this dilemma by explicitly giving American companies ownership rights to whatever bounty they extracted from an asteroid -- but not rights to the asteroid itself. Although somewhat controversial, the law boosted a nascent industry that had been inhibited by uncertainty.
Luxembourg has now followed suit. In addition to extending property rights for asteroid miners, its new law sets up a framework for authorizing and supervising them, including provisions on corporate governance. It also added a self-interested wrinkle: Any asteroid miner that wants Luxembourg's legal protection must have an office in Luxembourg.
Becoming the Delaware of asteroid-mining business registrations is just part of a larger strategy. Luxembourg plans to invest at least $200 million in related R&D projects, and has offered to purchase equity stakes in companies that move there. Among those accepting the offer were the two leading U.S. asteroid mining companies: Planetary Resources Inc., which received a $29 million investment, and Deep Space Industries Inc., which has agreed to co-fund its first spacecraft with the government. Other space companies are starting to see the advantages.
Luxembourg's success in attracting these companies should show other small countries that space isn't just for superpowers any more. Its commitment to property rights in outer space may have seemed esoteric, but it has helped foster a growing industry based on cutting-edge science and technology. Even if asteroid mining turns out to be a bust, the investments made in these companies should have lots of Earth-based dividends, and will undoubtedly benefit other space missions.
And that could be the real key. Competition has made space achievable for many more companies, and for the countries that support them. Industries from agriculture to logistics to retail are now seeing the benefits of getting a satellite into orbit, while others are pursuing even more ambitious goals. As the space economy grows, it should have benefits for decades to come -- on Earth and well beyond.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the editor responsible for this story:
Timothy Lavin at email@example.com