The Coming Space Race: And the One Commodity to Own

Last month, my family and I headed to Deep Creek Conservation Park on the Fleurieu Peninsula in South Australia.

Camping for a few nights and hiking, although we are limited by how far we can get with a three-year-old in tow!

It’s great to get out and see that night sky without all those city lights drowning out the stars, but something I wasn’t prepared for was the sudden emergence of satellites.

A swarm of nighttime eyes now silently logs our existence.

When I was a kid, one or two satellites were the norm; now there are dozens constantly moving across the sky!

Between Elon Musk, China, and every other country with a budding space program, there’s a race above our heads that barely anyone notices.

And according to a bloke called Tyler Letarte, vice president of AE Industrial Partners—an investor in space technology— he thinks we are on the verge of having tens of thousands of satellites in the night sky before this decade is out.

So, get out there now, because the night sky could look MUCH different in five years!

According to Letarte, most of that satellite proliferation will come from the US and Chinese militaries, racing to stake their claim around Earth’s orbit.

If you’re like me, you might view satellite growth as a modern-age plague. A technological epidemic.

But that doesn’t change anything.

In 3-4 years, there’s a good chance the night sky will swarm with these bloody things!

So, if you can’t beat it, why not try to find an investment angle?

That’s something I’ve been looking into in recent weeks.

And in terms of the raw materials needed to build these things, one commodity keeps popping up as a potential opportunity:

SILVER

You see, once you get beyond the protection of Earth’s outer atmosphere, conditions get tough.

Solar flares, extreme bursts of radiation and rapid temperature changes make anything on Earth seem like a cosy hideaway.

That’s why satellites need extreme protection, and a key aspect here is the silver and aluminium outer foil layer.

That’s what makes these multi-million-dollar marvels look like a geeky middle-school science experiment, see for yourself below:

But there’s more to silver than just the outer wrapping foil surrounding satellites.

Silver also coats internal components, protecting them from solar radiation and keeping the satellite’s interior at a stable temperature.

But as well as protection, silver is critical for the actual internal OPERATION of the satellites.

Given the huge expense of launching these things into outer space and the fact that you can’t fix them when they’re up there, they need to be built for extreme reliability.

That’s why silver often replaces copper in electrical components; silver is the ultimate conductor of electricity. ‘Rich man’s copper.’

And it’s a luxury that can be afforded for anything space-related.

That makes silver indispensable for fancy electrical components like amplifiers, waveguides, and antenna systems.

Another use for silver in satellites: solar cells.

Satellites use high-purity silver paste in solar arrays to ensure maximum energy conversion, vital for maintaining functionality in extreme radiation environments.

Anyway, you get the point.

Satellites soak up a lot of silver.

But how much?

According to one source, a medium-sized satellite uses up to 75 ounces of silver. On its own, that doesn’t sound like a lot.

But, according to the US Satellite Industry Association, 2,695 satellites were launched into Earth’s orbit last year.

That’s about 200,000 ounces of pure silver!

It also means that about 200,000 ounces have been sent out into outer space, never to return. Gone!

But here’s the interesting thing…

In 2020, there were just 3,371 satellites in orbit.

By late last year, there were 11,539!

A monstrous 240% increase in less than five years. No wonder these things dominated the night sky at Deep Creek a few weekends ago!

And if that space investor I mentioned earlier is right, and countries collectively start launching tens of thousands of these things each year…

Well, that adds up to millions of ounces of silver being pumped into the outer atmosphere… Never to return.

But will Satellite Proliferation be enough to turn the dial on Silver Consumption?

I think it is. Especially when you consider there’s no circular economy in satellite production.

It’s a bit like the metals used in building missiles or bullets: once they explode, they’re not coming back. Mine it, and it’s gone forever.

It’s a trend worth watching, especially considering satellites are just one aspect of the future space race… Many other things will be built to expand humanity’s presence beyond Earth.

And silver could be the key raw ingredient in all of it. It’s the metal of choice if you think space development is real.

By the way, investing in raw materials is just one aspect of this opportunity. You could also look at small companies building and designing innovative technology in space engineering.

It’s an emerging branch of the small-cap sector, and one that has potential for exponential growth, including here in Australia.

That’s something my colleague Lachlann Tierney is looking into with his latest project—exciting and emerging opportunities in the small-cap space.

You can check that out here.

Enjoy!

Regards,

James Cooper,
Editor, Mining: Phase One and Diggers and Drillers