The $700 Quintillion Ruse

Written by Adam English
Posted August 12, 2021

A couple weeks ago I wrote about how space and astronomy news has some of the most egregious articles you can find.

So much so that it is burying information about actual developments and real opportunities.

Last week, fellow Outsider Club editor Luke Burgess wrote about the promise, and limitations, of moon mining.

Today I’m going to talk about the common ground between those two articles, and it all focuses on what headlines claim is an asteroid worth $700 quintillion dollars, or $700,000,000,000,000,000,000.

Psyche 16 is a huge lump of metal hanging out in the asteroid belt between Mars and Jupiter and is most likely a failed planetary core about 200 kilometers in diameter.

At some point, it appears that it was building up mass the way a planet would, slowly accumulating material that differentiated into a dense core and a lighter crust about 500 kilometers in diameter, before being knocked around and losing its outer layers.

What’s left is a dense core of heavy metals, most likely rich in gold, iron, and nickel. Estimates suggest quantities that, at today’s prices, add up to $700 quintillion in resources.

That’s just about enough to make everyone on Earth a trillionaire. NASA even has an exploratory mission heading to it that should launch next year.

Rejoice! Halcyon days are right around the corner. Except it doesn’t work that way. Not now, not in our lifetimes, and probably never.

First up we can knock out that concept of Psyche 16 being worth $700 quintillion dollars. Sure, it can be estimated to be worth that much, but only if it and all other space resources are never mined.

Imagine if we figure out a way to bring that much gold, iron, and nickel back to Earth. It would all become functionally worthless due to the sheer quantity of it flooding markets.

Sure, it is overly simplistic when presented this way, but so much for that headline-grabbing price tag.

Dive into the details and it becomes apparent that the real problem is the cost of mining the ore. It may never make sense to extract it and bring it back to Earth at all.

As Luke pointed out in his article last week, it cost $10,000 per pound to get into low-Earth orbit until recently. Even with a projected cost of $2,500 per pound using SpaceX’s Falcon 9, it would cost $50 million to get a single bulldozer into space — not that it would work out there without massive modification and tons of extra weight.

It gets worse. The amount of fuel required to send heavy objects into orbit is profoundly limiting. So much so that it is often referred to as the “tyranny of the rocket equation.” If you want to read up on it elsewhere, we’re talking about the Tsiolkovsky rocket equation. A practical explanation will suffice here.

To get something into orbit, you need to reach a velocity that exceeds Earth’s gravitational pull and maintains it over enough time to escape that pull.

For small things, that’s no big deal. Light elements like hydrogen and helium naturally escape into space from Earth’s atmosphere all the time by floating up and getting an energy boost from solar radiation.

For mining equipment, it’s a huge issue. It takes far more energy to change the momentum of more massive objects enough to reach escape velocities. So you need more fuel. That means you need more structural mass built into the rocket. So you need more fuel again. Then you need more fuel to push the mass of that added fuel.

It quickly gets out of hand and forms an exponential increase. It’s so bad that payloads of the Saturn V rockets accounted for about 4% of the total prelaunch mass. The space shuttle barely touched 1%.

Of the 3,250 tons of a fully loaded Saturn V, only 130 tons of payload could be hauled to low-Earth orbit or just 45 tons for a trip to the moon. Meanwhile, the space shuttle weighed in at 2,250 tons at lift-off and could haul just 20 tons with it.

Then there is the problem of bringing it down to the ground. We could hurl large chunks of ore into the atmosphere and have most of it vaporize, or we’d need to launch something to go up and bring it down with insulating heat shields. Needless to say, that only drives up the cost that much more.

In reality, space mining is going to be extremely expensive as we build up infrastructure somewhere, probably the moon. It will require technology we still don’t have, like a way to produce fuel off of Earth. Even then, it makes little sense to bring it home.

Space mining, as a result, is only really feasible for building things in space. Even then it won’t happen in our lifetimes on any large scale, if it happens at all.

There are plenty of opportunities to profit from the space sector. A rapid expansion of satellite technology is happening now, and it is causing a boom in space launches.

Mining won’t be a part of it though, at least not without outlandish technological breakthroughs based on science that doesn't even exist yet.

Even some of the most in-demand and hard-to-extract materials, like some rare earth elements and other elements critical to next-wave battery tech, will come from beneath us and not from above.

It may not bring in quintillions of dollars, but it will be wildly profitable.

Take care,

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Adam English

follow basic @AdamEnglishOC on Twitter

Adam's editorial talents and analysis drew the attention of senior editors at Outsider Club, which he joined in mid-2012. While he has acquired years of hands-on experience in the editorial room by working side by side with ex-brokers, options floor traders, and financial advisors, he is acutely aware of the challenges faced by retail investors after starting at the ground floor in the financial publishing field. For more on Adam, check out his editor's page

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