The race to conquer the cosmos

My colleague Harry Hamburg recently covered the concept of the world’s first trillionaire coming from asteroid mining.

World renowned scientists such as Michio Kaku and Neil deGrasse Tyson have added their two cents to the world of capitalism; they’re betting this sector will produce a new level of wealth for a lucky few.

That alone may not turn heads, scientists are not fund managers for a reason. But what’s interesting is that Goldman Sachs seems to agree. The gargantuan investment bank had this to say in a 98-page report on the subject:

While the psychological barrier to mining asteroids is high, the actual financial and technological barriers are far lower. Prospecting probes can likely be built for tens of millions of dollars each and Caltech has suggested an asteroid-grabbing spacecraft could cost $2.6bn.

Harry has erred on the side of caution about this, pointing out that as soon as you mine a trillion’s worth of platinum (or any rare earth metals) the supply would force the price to drop. It’s basic supply and demand.

The concept itself is also extremely farfetched and distant, but that hasn’t stopped a number of companies that are seriously trying to get in on the action.

Planetary Resources is a company that is making great strides in identifying and harvesting asteroids that contain a high amount of water, which it claims is key if we are serious about becoming a spacefaring species. It’s making sure there’s as few barriers to entering this field as possible too, having successfully lobbied the passage of the US Commercial Space Launch Competitiveness Act (H.R. 2262) and partnering up with Luxembourg to advance the space resources industry.

Mentioning Luxembourg along with the US may seem odd, but surprisingly the country may be one of the great founders of this industry. Luxembourg has been supporting the asteroid mining sector for years now with various acts and investments. It’s also partnered up with a company called Deep Space Industries who, by its artist impressions alone, deserves a lot of attention!

Asteroid mining is of course just one potential industry that space can provide. The more mainstream news stories on this topic all highlight the more tangible companies we all know and love.

Virgin notoriously has been trying to make space tourism a thing for a while now with various levels of success.

And the controversial Elon Musk, who I’ve just decided to nickname Mr Marmite, is attempting to manufacture the best rockets and spacecrafts available. His 3,245th company Space X has an end goal of enabling humans to colonise other planets; to prove his sincerity he recently launched one of his cars into space, seemingly just to show that he could.

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I’m not the first to say it, but there is a lot of evidence that the commercialisation of space could be just around the corner. There are already more than 1,300 active satellites orbiting the planet, and within the next decade companies are expected to launch an additional 15,000 satellites/spacecrafts into low Earth orbit.

Clearly this business is on the verge of booming but inevitably, and regrettably, whenever huge opportunities like this rear their head there seems to always be a negative consequence that cannot be ignored, no matter how much we may want to.

Cleaning up after a new space race

Space junk may indefinitely halt our dreams of dominating the cosmos.

As it stands, there are hundreds of thousands, if not millions, of pieces of space debris that orbit our planet. These are usually the result of previous space missions and they are such a nuisance that the US Air Force has a whole team dedicated to tracking as much of it as possible.

These pests of the heavens can range from the size of a spec of paint to several metres wide. They are moving so fast that they can be disastrous for any operational satellite or, God forbid, astronaut that dares get in their way.

You may think that the sheer size of Earth and the space around it is so vast that this problem is miniscule, but both its current and future impacts are severe. In 2014 the International Space Station had to be moved three times to avoid collisions and if the amount of debris keeps on growing we could essentially be trapped on Earth within the next couple of centuries.

So much of our current technology and communicational prowess is dependent on satellites, and if we can’t launch any more or fix the ones that are already up there – let alone venture out further – our very way of life could come to an abrupt pause.

But as always, the doom and gloom is being met head on with hope.

The race is on to find solutions for clearing up all the space junk that litter our skies, and we are seeing a number of companies emerge who are dedicated to this goal. Many of them are already showing signs of commercial promise and technical brilliance.

Astroscale prides itself on being the first private company with a mission to secure long-term spaceflight safety by developing space debris removal services. It is taking a holistic approach to this by incorporating business models, technology and legislation and has recently showcased its technology to Japanese Prime Minister Shinzo Abe.

D-Orbit, a European satellite fleet management company, has recently partnered up with the European TeSeR project. A joint effort that is focused on reducing the risk of spacecraft colliding with debris in space. D-Orbit aims to bring its experience of removing and decommissioning spacecraft and satellites to the table.

Launchspace Technologies has a bit more experience in this field. It has been around for decades, having worked with commercial, government and military clients, it has been pioneering in spacecraft advances. It is fully aware of the problem and has a mysterious patent pending which it says will result in a low-cost and technically feasible solution to the orbital debris problem in low Earth orbits.

An unlikely similarity…

I’m a believer that when one industry or concept takes off it can sometimes result in a juxtaposition of success for corresponding industries. To show an example, let’s take a quick look at another industry which we’re fond of here at Southbank Investment Research: cannabis.

We’ve highlighted that Canada will likely be pioneering in the cannabis sector and have already made recommendations to reflect this. There’s a Canadian company I’ve had my eye on called Micron Waste Technologies whose services include managing the wastage generated by cannabis farmers/cultivators. If we take a look at its recent share price, we can see two recent jumps:

The jump around August 2016 occurred just as Canada announced it would allow medical marijuana patients to grow their own cannabis. The second jump towards the end of 2017 also occurred around the same time that Canadian provinces reached a deal to allow effective taxation of legal cannabis.

I’m not an expert in analysing what moves shares, but I think it’s evident that sometimes a rising tide will lift all boats.

So yes, it may be the case that the first trillionaire could come from a space miner, just as the first billionaire came from an Earth miner. The space-faring industries may get the best rewards and have a huge celebration, but let’s keep an eye on the sector that will have to do the cleaning up after them, utilising some incredibly technical dustpans and brushes to do so!

All the best,

Connor Coombe-Whitlock
Junior Research Analyst, Southbank Investment Research

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Category: Technology

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