This week comes with news:
‘A Canadian-based mining innovation company is opening a new office in Adelaide to study the application of its ore crushing and grinding technologies to remote mining operations envisaged on the Moon.’
CEO and co-founder of Rockburst Technologies Oscar Malpica said:
‘We will be exploring space mining/recycling applications of our technology in collaboration with the University of Adelaide and its Lunar Construction Group.’
Mining the Moon may sound like some futuristic science fiction. However, plans for it are far more advanced than you may realise.
In fact, Australia is at the forefront of much of the research in this area.
And while the Moon may not have a land cycle, at least not as we conceive it on Earth. And possibly won’t for a long time.
It’s about to start a commodity supercycle.
The story starts, perhaps, with former US President and real estate mogul Donald Trump.
He wanted to explore and enforce space well before he became a candidate for president.
On winning power, he set his plans into action, announcing his intention to create a ‘space force’ that would oversee the military’s activities away from Earth…
‘My new national strategy for space recognizes that space is a warfighting domain…
‘When it comes to defending America, it is not enough to merely have an American presence in space.
‘We must have American dominance in space. So important.
‘I’m hereby directing the Department of Défense and Pentagon to immediately begin the process necessary to establish a Space Force as the sixth branch of the armed forces.’
Donald Trump,
June 2018
Some of this had to do with the defence of satellites — at least, that was the story told.
China and Russia have been working on methods to disrupt satellites with lasers or electronic jammers for a few years.
China successfully shot down a satellite in 2007. In 2019, India did the same. Russia has also tested such a weapon.
Shooting down a satellite is not easy. They reportedly move around Earth at 17,000 miles per hour…
Still, the consequences of losing them cannot be underestimated.
If you think a pandemic disrupted your life, imagine the rapid communication systems that have tied the world together, unravelling altogether.
Space war, however, is not so much concerned about satellites and the air space they occupy as it is about land.
The Moon’s commonwealth
China produces 90% of the world’s rare earth metals (REM).
From 2004–2017, China accounted for 80% of US rare earth imports.
And global demand for critical minerals is set to skyrocket by 400–600% over the next several decades.
For minerals such as lithium and graphite used in electric vehicle (EV) batteries, demand will increase even more — as much as 4,000%!
The US is increasingly dependent on foreign sources for many of the processed versions of these minerals.
Fractions over existing trade disputes have threatened supply lines.
Hence, the Biden Administration announced a while ago that it is investing millions to bolster domestic production.
However, the Moon is said to have a treasure trove of REMs!
Hundreds of millions of dollars’ worth.
So much so, it’s almost impossible to estimate.
It’s waiting to be claimed…by force if necessary.
Helium, silicon, iron, magnesium, calcium, aluminium, manganese, and titanium are in abundance on the Moon.
And with a mass of 73 square tonnes, or one metric tonne of material each day would barely make a dent.
At that rate, it would take 220 million years to deplete 1% of the Moon’s mass.
So, while controversial, mining the Moon is argued as a much safer ‘environmentally friendly’ option to mining the Earth.
The Artemis Accords
No surprise then, when Trump established a space force, he had his vision set firmly on the moon’s abundant resources. Knowing that to mine them also required a space force to protect the territory around them.
It’s why he advanced the US’ plans to return to the moon.
The Trump administration drafted a legal blueprint for mining the moon under the US-sponsored international agreement called the Artemis Accords.
The agreement establishes ‘safety zones’ around moon bases to prevent damage or interference from rival countries or companies.
It also allows companies to own the resources they mine, including the land and location of the bases under international law.
The most valuable piece of real estate in the solar system
You may think that the Moon — as large and abundant as it is in minerals — is big enough for every mining company and then some, to claim a piece.
But this is not the case at all.
In fact, only one location on the Moon is accessible for mining and human habitation — and we’ve never been there.
The Artemis program will be heading to the southernmost point on the Moon, the Lunar south pole, where it’s not easy to land.
It has been called the most valuable real estate in the solar system for good reason.
Think about it.
Most of the Moon is either bathed in permanent sunlight or permanent darkness. Temperatures reach extremes of 120 degrees Celsius (or 253 Fahrenheit) in a Lunar day. And they drop to -232 Celsius (or -387 Fahrenheit) in a Lunar night.
The south pole, however, has an ideal balancing point.
Almost as if it were designed that way.
Sunlight strikes the south pole at a low angle.
At the south pole, the Sun casts long shadows across the lunar surface.
And in the craters at the south pole, the sunlight never reaches the bottom.
That means they contain permanent ice deposits that are not melted away by Sunlight.
The ice deposits have been there for billions of years. They are estimated to hold nearly 100 million tonnes of water. And water is, of course, vital to the success of an established human base on the Lunar surface.
It can be separated into hydrogen and also oxygen to breathe.
Combine them, and you’ve got rocket fuel!
You could even use water as a propellant for a space-based steam rocket.
And it is an excellent shield against radiation.
This is why the Lunar south pole is the only area considered suitable for human habitation.
Every space-faring country wants to put its flag there and lay claim to the land.
Its regolith (the rock and dust that sits on top of the south pole’s bedrock) has traces of hydrogen, ammonia, methane, sodium, mercury, and silver.
So, location matters as much on the Moon as it does on Earth.
The real wealth to be made will be with the companies that have control over the critical components needed for mining the Lunar south pole.
I’m not talking about investment in the mining companies here.
Rather, for these companies to establish a base on the Moon, critical infrastructure will be needed.
And don’t forget; it is infrastructure that drives land’s value.
Imagine for a moment that you could purchase the most valuable piece of real estate in a skyscraper.
I’m not talking about the penthouse.
I’m talking about the elevator!
Just think of the money you could syphon from residents by charging a fee for each trip they take.
Your ‘elevator tollbooth’ would give you a perfect means of extracting a large proportion of income and, therefore, economic rent (land value) from the site.
Without free access to the elevator, the building would be a walk-up and walk-down, and rents would fall.
The more you were able to charge for each trip up the elevator, the less a tenant would be able to pay to rent the apartment (or buy the apartment).
This would reduce the value of the apartments — but increase the value of the elevator…
It might sound like a crazy concept.
But it will help you understand where I’m going here.
It’s why the ownership of infrastructure (as well as the locations that advantage from it) is incredibly profitable.
For example, you can own the most abundant oilfield in the nation.
However, if you do not control the pipeline, the companies that do will syphon off a lot of the profits from your oil.
This is why Enagás (Spain), Fluxys (Belgium), GRTgaz (France), and Snam (Italy) are the four biggest gas companies that you’ve never heard of.
Collectively, they own more than half of the EU’s LNG terminals.
That’s more than 100,000km of pipeline.
These companies are desperate to keep Europeans hooked on fossil gas.
They spend millions lobbying governments to ensure it.
One day they’ll lose the battle, but not before someone has worked out a way to take advantage of the economic rent of renewables.
It’s why classical economists (such as Henry George) said that transportation — be it utilities, information, goods, or people — should be a public affair.
Except, of course, in our rentier economy, they are not, and neither will they be on the Moon.
The most lucrative moon mining companies…
Without doubt, some of the most lucrative companies in the space arena will be those that draw from the economic rent of land on the Moon.
I’m talking about those that build, and own, the pipelines that transport the most critical elements needed for human habitation.
- Oxygen
- Hydrogen
- Nitrogen
A pipeline is the most efficient mode of gas storage and transfer on the Lunar surface.
The charge for delivering these resources will syphon the economic rent of land surrounding the pipeline’s location — making the companies that dominate this space, perhaps the most lucrative of all.
This is the area where, in time, there will be opportunities for investment.
It’s early days, but in Australia, I happen to know of one organisation at the forefront of research and development in this space.
It’s a company called Australunar — you can read about them here.
In future there will likely be more.
It is a space race after all.
‘Australunar estimates that the first prototype of its Earth-made pipeline components will be TRL 7 and deliverable for testing by 2028.’
The timing marks the peak of the K-wave (see side box above).
The date — as per the cycle — heralds a worldwide recession. The leadup gives a possibility of war.
There will be opportunities that come out of the recession with the companies developing the technology that will transport us into the future.
To find out to take advantage of the unique investment opportunities in this space — a to take advantage of the booms and hedge against the busts — sign up to Cycles, Trends & Forecasts today.
Best Wishes,
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Catherine Cashmore,
Editor, Land Cycle Investor
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