The rest of the media were reporting on an asteroid named 16 Psyche last month worth $10 quintillion. Oddly enough they reported in July 2019 and again in February 2018 that the same asteroid was worth $700 quintillion, so it seems the space rock market is similar to cryptocurrency in its wild speculation. Those numbers are ridiculous, but it had us thinking about the economies of space transportation, and what atoms are worth based on where they are. Let’s break down how gravity wells, distance, and arbitrage work to figure out how much of this $10-$700 quintillion we can leverage for ourselves.
The value assigned to everything has to do with where a thing is, AND how much someone needs that thing to be somewhere else. If they need it in a different place, someone must pay for the transportation of it.
In international (and interplanetary) trade, this is where Incoterms come in. These are the terms used to describe who pays for and has responsibility for the goods between where they are and where they need to be. In this case, all those materials are sitting on an asteroid, and someone has to pay for all the transport and insurance and duties. Note that on the asteroid these materials need to be mined and refined as well; they’re not just sitting in a box on some space dock. On the other end of the spectrum, order something from Amazon and it’s Amazon that takes care of everything until it’s dropped on your doorstep. The buyer is paying for shipping either way; it’s just a matter of whether that cost is built into the price or handled separately. Another important term is arbitrage, which is the practice of taking a thing from one market and selling it in a different market at a higher price. In this case the two markets are Earth and space.
Where did $10/$700 quintillion come from?
Here’s what we know:
- The best mass estimate right now is (2.41±0.32)×1019 kg (source PDF).
- 10 quintillion is 1×1019 (yes, 1 quintillion is 1×1018, but the units work out better this way).
- Estimates at the composition of the asteroid are metals, mostly iron and nickel, with about 10% being silicate rock with a sprinkling of other elements inside. This is from surface spectral analysis, as well as calculations of its density, but for all we know it could be filled with nougat and gold.
- The current price of iron ore (on Earth) at the time of writing is $0.1235/kg.
- The current price of nickel is $14.857/kg.
- The current cost of putting a kilogram of material into low earth orbit on a Falcon 9 is roughly $2700.
The handy thing about these facts is that we can cancel out some units and pretend that there’s 2.4 kg of stuff and it’s worth $10. Subtract 10% from the silicate rock and you have 2.16 kg. If it were all iron, it’d be worth $.27. If it were all nickel it’d be worth $32.09. If it’s 50/50 then it’s $16. So the $10 quintillion is just a giant guess using current market prices of the metals that are likely present in the asteroid, and assuming the material is already on Earth. In fact, the author who came up with the number said exactly that.
To get $700 quintillion, consider the fact that the mass is already in space and that we want to keep it there. That means that each kilogram that’s already up there is worth $2700/kg in transportation costs and then we add the $10 quintillion in arbitrarily assigned value based on its worth on Earth, so the asteroid is worth $5,842 quintillion. Ok, I don’t know how they got $700 quintillion, but it’s a pointless clickbait number anyway.
Why Would We Even Want It Here?
An asteroid of 100km in diameter entering our atmosphere would completely sterilize Earth by imparting enough energy to boil the oceans. A mere 10 km rock could be an extinction level event. At a diameter of 200 km, we really don’t want all that mass crashing down on us, especially if it’s a particularly heavy metallic beast like 16 Psyche that won’t break up or burn up in the atmosphere. That would really hurt the market for iron or nickel. Even if it were broken into lots of pieces, anything larger than the size of a car crashing down without something to decelerate it is going to do considerable damage wherever it lands. That kind of risk, as well as the security threat of any country or organization controlling it, makes parking an asteroid in Earth’s orbit extremely unsettling. Besides that, there’s already a giant rock filled with iron in Earth’s orbit (3,474 km in diameter), and we’ve already landed on it before.
There’s a lot more iron and nickel here on Earth, and it’s readily available on all continents. Getting these ores from an asteroid and bringing them to Earth would be like getting your drinking water in a square bottle from a foreign island and flying it back to you when you have tap water nearby.
Current iron ore production worldwide is 2.6×109 kg/year. Nickel is less than 1% of that. At our current consumption rates of those materials, it would take us a mere 8.3 billion years to consume it all, during which the value of those ores would likely decline.
What Would It Take to Bring It Back?
My orbital mechanics are rusty, so this next bit might be off by a few orders of magnitude, but to move the asteroid from its current position to Earth’s orbit would require a Delta-V of about 10 km/s. E=1/2mv2, so 1.2×1019*100002 = 1.2×1027 joules, or 3.3×1020 kWh. This is, of course, ridiculous (a theme in this article). Maybe you could even hurl chunks of it backwards and trade mass for velocity. You wouldn’t want to move the whole thing at once, either; you’d probably mine a chunk at a time. And it would make the most sense to set up a refinery on the asteroid so that only the most valuable materials were shipped back. Assume, then, that you can set up a station on the asteroid that refines the material, bundles it up into a pretty package, and hurls it towards Earth.
Next, you’d need to be able to crash it down on Earth reasonably well enough to narrow its return to a few hundred mile radius, preferably in the middle of the ocean, so as not to destroy entire cities. It probably won’t float when it lands, so you’d have to have the equipment to go recover it before it sinks.
If the contents are just iron, you have to be able to do all of this for under $.1235/kg, or else you can’t compete with home-grown ores. Even if it’s palladium or platinum, you’ll probably barely turn a profit once you take into account getting all the mining and transportation equipment up there, getting the material back, and recovering it.
The Real Value of 16 Psyche
16 Psyche imaged by the Very Large Telescope’s adaptive optics SPHERE imager with a Richie Rich filter. (CC BY 4.0 https://commons.wikimedia.org/wiki/File:Psyche_asteroid_eso_crop.jpg)
The way 16 Psyche could be useful to us is the fact that it’s already in space. If the future of humanity is in getting off the rock we’re quickly spoiling, then that means moving materials out of the gravity well of Earth or using resources that are already out there. Most asteroids are rock that is not very practical, but 16 Psyche has been identified as one that has a lot of the materials we like to use for building structures. If we sent the appropriate refining equipment to the asteroid, it could become a viable starting point for the construction of space vehicles. Then the $2700/kg could be spent on the materials like electronics and plastics and other raw supplies that can’t be sourced elsewhere, yielding a lower overall cost for the ship created in space. Going back to the arbitrage term, the market for iron already in space is very different from the market for iron on Earth; it would be a bad financial decision to try to sell the space iron on Earth. There are missions to visit this and other asteroids like it to figure out what exactly they are made of. If they are valuable materials for the construction of space habitats and vehicles, then it might make sense to mine them. But the likelihood is low that the material is plentiful on the asteroid and not on Earth and valuable enough on Earth that sourcing it off-world and bringing it back is the best option commercially.
Ultimately, the value of something is not just in the thing itself but also the cost to get it to where you want it. Putting $10 quintillion on an asteroid in deep space is completely meaningless because nobody wants all that material way out there right now, it would take billions of years to use it all, and it’s a plentiful material that’s readily available here on Earth already. But if that number is still interesting to you, I’ve got a local star putting out 3.846×1026 watts, which at $.12/kwh is about $4.6×1022 or $46 hextillion dollars an hour. All you have to do is build a Dyson sphere.read more
