Asteroid Mining Will Crash the Platinum Market, But That’s Good News for Earth

A pair of system dynamicists from MIT have studied the impact of asteroid mining on the platinum group metals (PGMs) market. They found that asteroid mining could significantly reduce the prices of PGMs, which are essential in modern industry. AstroForge, a start-up in California, is developing small, agile probes to mine PGMs from metallic asteroids. These probes use magnets to latch onto asteroids, then vaporize the crust with lasers and refine the PGMs. The company aims to return high-value PGMs to Earth, bypassing the expensive and inefficient terrestrial mining processes.

The paper models the market impact over 20 years, predicting a two-phase transition. The first phase involves a "space gold rush" where PGM prices initially rise due to limited supply, leading to astronomical profits for asteroid mining companies. This drives private investment and expansion of space-based mining capacity. However, the second phase sees a decline in PGM prices as global supply increases, with terrestrial mines facing financial challenges. Over fifteen years, terrestrial mining supplies will be replaced by space-mined ones, causing prices to drop by over 75%.

This shift could benefit the global economy by making PGMs cheaper and reducing the cost of transitioning to a green economy. However, the transition faces engineering challenges and risks, including high-profile failures in AstroForge's development. Despite these challenges, the paper suggests that asteroid mining could lead to a more sustainable and affordable future for PGMs, potentially making those involved extremely wealthy within two decades.

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