The Economics of Platinum mining

[Bill Phil]

4 minutes ago, PakledHostage said:

Case in point: Aluminium. In the mid-1800's, it was worth more than gold. Now we throw it into the trash without giving it a second thought.

Even so, there's probably more revenue generated from aluminum today than in the 1800s.

[PakledHostage]

2 minutes ago, Bill Phil said:

Even so, there's probably more revenue generated from aluminum today than in the 1800s.

Very true. But on an ounce for ounce comparison, the point stands.

And pretty much 100% of the things we use aluminium for today were never considered in the 1800s. The jury is still out on whether we'd find equivalent utility for platinum if it were to suddenly become as cheap as borscht.

[Racescort666]

There is something missing from the discussion of economic feasibility: how much does it cost to bring platinum back to earth? We have a good idea of how much it costs to send stuff to space, we can make some reasonable assumptions on how much platinum we can get a hold of, but say we've found an asteroid that has the platinum we're looking for (also, prospecting isn't cheap either), what then?

How much does it cost to tractor an asteroid back to LEO or Lunar orbit or wherever your processing facility is? Do you process it in it's original orbit? It seems like it would be easier to process it in a more accessible orbit but is there a cost break between onsite processing or moving the asteroid to an orbit that already has infrastructure? 

There will be byproducts that could be monetized but that's not really part of this discussion. I think the questions are:

• What is the mass of the asteroid/mass of platinum?
• How much dV do you need to get to your target asteroid?
• How much dV is needed to bring the asteroid to the processing facility?
• How big (heavy) is an asteroid processing facility?
• How do you get the platinum down to the surface?
  • In a ship?
  • Ballistic?

If you want the raw metal, I assume a chunk of metal would be pretty easy to get down, you just crash it into the ground or the ocean at a speed where it doesn't break up too much. However, if that is not an option, what kind of spacecraft would you have to build to bring one down safely?

Spoiler

Also, I work just down the road from the Rouge plant and while it is nothing like it was in it's heyday, it is still a very impressive complex. They build the F-150 there which has a production volume on the order of 700k-800k/year just for the US market and that's only split between 2 assembly plants. If you run the math down, (50 weeks/year, 7 days/week, 24 hrs/day) they come off the line 1.5 times a minute between the 2 plants. In reality, it's about 1 truck every 45 seconds at each plant because they run the typical 2 shifts for 5 days a week. Ford also maintains other operations within the Rouge complex just not the ones outside of "core competencies" as mentioned up thread.

I would say the auto industry is a weird one to compare to when it comes to vertical integration. Manufacturing and design often gets pushed down to suppliers that are specialized but many OEMs maintain engine and body manufacturing. There are various reasons for this but it generally comes down to quality control. When you look at the Rouge plant in the heyday, it was a necessity for quality control since manufacturing at that scale was somewhat unprecedented. As the company grows, responsibility gets pushed down a tier but cost roll up maintains so divisions end up operating as business units responsible for profit reporting rather than some internal cost. If they can't maintain profitability, they might get split off or reorganized. The auto industry, however, is very mature which is why you don't see as much vertical integration like you do with companies like SpaceX.

SpaceX, looking to cut costs, decided to develop from the ground up a whole bunch of major components which previously had been developed for government contracts. Without delving into violation of the forum rules, it was necessary for SpaceX to bypass the established supply chain and had to bring manufacturing in house to control costs and control quality. In the future, there could be a separation of SpaceX engine development an other vehicle systems but that's purely speculative.

 

[radonek]

2 hours ago, Racescort666 said:

How much does it cost to tractor an asteroid back to LEO or Lunar orbit or wherever your processing facility is?

I do not think this model is viable. Tractoring asteroids requires more patience then could be expected from investors. Also, doing it puts one firmly into superpowers club  whose current memebers are not exactly welcoming new applications.

[Bill Phil]

6 minutes ago, radonek said:

I do not think this model is viable. Tractoring asteroids requires more patience then could be expected from investors. Also, doing it puts one firmly into superpowers club  whose current memebers are not exactly welcoming new applications.

While there are investors who prefer short term benefits, there are some entities that invest on more long term time-scales. Moving an asteroid closer to Earth, while taking quite a bit of energy, could be economical if the mass required to mine it is quite large. Not to mention the greater ease of returning the platinum and the potential benefits of the other materials for in-space use.

[CastleKSide]

The problem with using mined platinum to create a product and selling that product rather than selling the platinum itself is unless you are selling close to the price such product would be sold at if made with earth platinum, you create an economic opportunity for people to buy your product, take the platinum out and sell the platinum at profit. Essentially, you would still be selling platinum, just in a different form.

Back to the question of what to do with the platinum, I think that if the price of platinum dropped like the price of aluminium did in the 20th century, we would start to see more and more uses for it. For instance one of my ideas has been using it for machine parts in salt water environments, as it would not corrode like steel. Maybe plate the hulls of ships with platinum? or using it in tidal generator turbines, desalination plants. Having a metal which is that inert cheap would be a boon to many engineering challenges. What would such a market look like? I have no clue, but once we have a serious economic incentive to go to space, I think the drive to make space exploration more accessible will reach a whole new level. That's simply the way capitalism works.

[StrandedonEarth]

29 minutes ago, CastleKSide said:

The problem with using mined platinum to create a product and selling that product rather than selling the platinum itself is unless you are selling close to the price such product would be sold at if made with earth platinum, you create an economic opportunity for people to buy your product, take the platinum out and sell the platinum at profit. Essentially, you would still be selling platinum, just in a different form.

Hmm, I didn't word my OP properly / clearly enough. Part of the plan would require dumping enough on the market to crash the price, making the quoted scenario unprofitable

[CastleKSide]

2 minutes ago, StrandedonEarth said:

Part of the plan would require dumping enough on the market to crash the price, making the quoted scenario unprofitable

If you have already dropped the price from the current market value of platinum, then we have the scenario where platinum is as common as aluminium and that is simply a great future and one I hope to see.

[Bill Phil]

38 minutes ago, CastleKSide said:

The problem with using mined platinum to create a product and selling that product rather than selling the platinum itself is unless you are selling close to the price such product would be sold at if made with earth platinum, you create an economic opportunity for people to buy your product, take the platinum out and sell the platinum at profit. Essentially, you would still be selling platinum, just in a different form.

This is true provided that extracting the platinum is easy. There are some very complex machines that take hours to just replace one component. If the person doing the extracting is paid well, then the amount of platinum wouldn't necessarily be any cheaper. Of course, then we're at the point where it would be expensive to put it together.

[StrandedonEarth]

1 minute ago, CastleKSide said:

If you have already dropped the price from the current market value of platinum, then we have the scenario where platinum is as common as aluminium and that is simply a great future and one I hope to see.

Likewise, which is why I think some entity needs to begin hunting for that legendary million-ton platinum lump of neutron-star fragment.

[CastleKSide]

Everyone here has probably heard of this, but here is the link anyway:

https://www.planetaryresources.com/

Company with the stated goal of mining asteroids. Interestingly they have the core of their market strategy based on mining water to turn into rocket fuel, to then sell already in space. This is to avoid the very problem we are discussing, the crashing of the price of platinum once asteroid mining becomes commonplace

[PakledHostage]

19 minutes ago, StrandedonEarth said:

Likewise, which is why I think some entity needs to begin hunting for that legendary million-ton platinum lump of neutron-star fragment.

The fabled El Asteroido platinum mine?

[StrandedonEarth]

6 minutes ago, PakledHostage said:

The fabled El Asteroido platinum mine?

Yep, that's the one, the one all the Belters are hunting for.

There was a tale from a Man-Kzin Wars anthology about an unlikely team of prospectors wandering around Wunderland. An ex-Belter got all excited when he spotted a platinum pebble in a stream, only to be told that during the Occupation, the Kzinti had shoved a platinum 'roid into low orbit, making the stuff as cheap as dirt. Nope, keep looking for gold...

[kerbiloid]

I'm afraid that at the point when industrial mining on asteroids will become technically possible, the total automation will make the "economy" term obsolete.
So, it's possible that the space platinum won't change market prices at all due to the absence of market.

 

On 18.02.2018 at 7:52 AM, HebaruSan said:

Ban deorbited raw materials, legalize deorbited products. If someone's going to crash the platinum market,

A pack of raw platinum sent from an asteroid and missed a little on deorbiting. would crash the platinum market and everything inside several kilometers around it.

Edited February 20, 2018 by kerbiloid

[Hannu2]

It is ridiculous to take current metal prices and multiply mass of large asteroid and get insane numbers. Space mining will work because it may crash prices of platinum group metals and rare earth metals. They have interesting properties and if they were cheap like aluminium it would be possible to make new mass products with better properties and lower prices and grow economy indirectly. Unfortunately it makes beginning of mining business even more difficult. There is no easy and fast revenues but whole industry must change.

[YNM]

3 hours ago, Hannu2 said:

There is no easy and fast revenues but whole industry must change.

... Or get a good 'ol monopoly off it.

"Look, a new land... MINE !! *yoink!*"

[Hannu2]

10 minutes ago, YNM said:

... Or get a good 'ol monopoly off it.

"Look, a new land... MINE !! *yoink!*"

It is quite difficult in space industry because there are practically infinite amount of asteroids and resources in Solar system (compared to current production levels or deposits on Earth) and no realistic means to prevent others to utilize them. Even some corrupted government would give monopoly to prime minister's brother's company there are many other countries which would certainly compete.

[YNM]

4 minutes ago, Hannu2 said:

It is quite difficult in space industry because there are practically infinite amount of asteroids and resources in Solar system (compared to current production levels or deposits on Earth) and no realistic means to prevent others to utilize them.

Time is your friend in this case I think.

Whoever gets there first and return the fastest will have a significant boost for their profit. After that it'll become placid.

[kerbiloid]

Keep calm, gentlemen.
Before some brave space captain gets there, cowardish nerds serving a greedy corporation will build a portable gamma-resonance metal scanner, put it into an orbiter and scan the asteroids, moons and planet crusts finding everything metal of a truck size.
Then they will employ the brave space captain to bring it here.

[wumpus]

22 hours ago, YNM said:

... And they'll probably just incorporate them straight in their cars.

No one sane enough is going to simply sell raw ore. No one.

That was pretty much my point.  If your business plan requires lots of cheap platinum, crashing the price of platinum isn't a problem (at which point selling raw ore is pointless, unless you need to stimulate the market of fuel cells).  But Toyota is in a unique position of "needing" cheap platinum and having the deep pockets to really do asteroid mining (assuming you just need to send a probe to grab and return with a large asteroid, presumably using ion thrust, solar sails, albedo adjustment of said asteroid, or some combination of all the above).

[YNM]

2 minutes ago, wumpus said:

But Toyota is in a unique position of "needing" cheap platinum and having the deep pockets to really do asteroid mining

I know the Japanese are doing well with asteroid-grabbing (Hayabusa and Hayabusa2), but is that for real ?

[wumpus]

22 hours ago, YNM said:

I know the Japanese are doing well with asteroid-grabbing (Hayabusa and Hayabusa2), but is that for real ?

I completely doubt it.  I can't take their insistence on fuel cells seriously, but it possible that they mean it.  If so, they might just want to give this a try.

If they have any such plans at all, they were likely low priority power points/white papers which might suddenly become possible with Falcon Heavy's cheap heavy lift capability.  Don't expect anything to happen fast (also note that Mazda's new Skyactive-X should make fuel cells pointless.  Getting "nearly fuel cell" energy out of gasoline will make building the infrastructure needed for fuel cells uneconomical at any cost).

- Edit: the only reason I brought up Toyota is that mining the first asteroid will be unbelievably expensive and will have to return massive amounts of ore for the expenditure.  Mining platinum this was would likely crash the market and thus flatten returns making it pointless to try this form of mining (of course, precious metals are a famous means of separating fools and their money).  On the other hand, Toyota might very well "need" huge amounts of platinum and has the money to go and get it.  Spaceflight is expensive: finding somebody willing to foot the bill can be well over half the battle.  I've never heard of Toyota mentioning asteroid mining.  They just keep talking about fuel cells that make no economic sense while platinum remains expensive (granted, I thought putting both electric and gasoline engines in a car was equally hilarious.  I now suspect that doing such will remain superior (for US-style driving at least) for quite some time).

Edited February 21, 2018 by wumpus

[YNM]

8 minutes ago, wumpus said:

Getting "nearly fuel cell" energy out of gasoline will make building the infrastructure needed for fuel cells uneconomical at any cost.

Guess you're putting that the wrong way...

But as emissions will continue to be cut (Euro6 is a super tough call (not sure what Euro7 will be), zero-emission zones is slowly being phased in), we'll see new initiatives.

[Antstar]

13 hours ago, Bill Phil said:

While there are investors who prefer short term benefits, there are some entities that invest on more long term time-scales. Moving an asteroid closer to Earth, while taking quite a bit of energy, could be economical if the mass required to mine it is quite large. Not to mention the greater ease of returning the platinum and the potential benefits of the other materials for in-space use.

This is an interesting topic. I think this is the most realistic reply so far.

You do know that there are no lumps of platinum floating in space right?

If you find one with 1% I would say that you have scored the find of a lifetime. However, where you find platinum, you will likely find high abundances of metals with similar chemistry. Metals with similar chemistry tend to be similarly rare on Earth (because they tend to the 0 oxidation state, and hence are lost into the core instead of forming "light" rocky oxides, sulphides, silicates etc) and because they have Z>26, hence can only be made by the neutron drip process in large stars (ie. low cosmic abundance - although I am simplifying, cosmic abundance and solar system abundance are very complicated). But like I said, they have similar chemistry, so they can potentially have similar applications. And fetch similar prices (like within an order of magnitude)

So, realistically, you bring your enriched-in-precious-metals lump of iron/nickel back to Earth. Then what? Well probably you separate the iron and nickel out and use it for orbital construction. This could be easy as they are both magnetic metals (though Ni is not ferromagnetic). These metals are great for construction and would be great for space construction too if you don't have to pay to get them off the ground. This will be most of your profit. Then you send the "not-iron/nickel" back to ground for further processing, since it has enough value on the ground to be worth it.

The premise of getting platinum from asteroids is flawed. The premise of producing platinum as a side product of asteroid mining industry is great!!

[DDE]

On ‎18‎.‎02‎.‎2018 at 5:35 AM, KG3 said:

  Iridium comes to mind as well.  But I thought the whole point of mining asteroids was the fact that the stuff was already in space.  I mean does a pound of platinum on earth cost more than putting a pound of... well anything into space?  Lets see, according to Wikipedia as of 2011 the price of platinum was about $2050 per troy ounce which comes to about $24,600.00 a pound.  What does it cost to put a pound of payload into orbit these days? 

  I do see your point.  Just the environmental benefit of not mining and processing the stuff on earth would be helpful.  Cheap fuel cells would be good too.

Significantly lower. No need for parachutes.

Looks like the REEs are where it's going to have to be instead of the platinoids, TBH. Although, again, I wouldn't be surprised if they aren't as much of a bottleneck as people like to claim.

7 hours ago, Hannu2 said:

and no realistic means to prevent others to utilize them

There's always the option of aggressively negotiating their ships into cinders before they leave Earth's SoI. All you need is a friendly government willing to play fast and loose with unilaterally imposed space law.

Edited February 20, 2018 by DDE