The Business of Space Travel
Since the advent of the space program, the realm of space exploration and science has been almost completely government-led. But those days are over with a number of new ventures, including Richard Branson’s Virgin Galactic, Amazon’s Blue Origin and of course Elon Musk’s SpaceX company.
Private funding has greatly advance rocket science, leading to reduced launch costs and reusable vehicles. NASA has even begun using private companies like SpaceX’s Dragon capsule to deliver supplies to the International Space Station. There’s a big push for returning to the moon, exploring asteroids and even going to Mars. That leaves investors with one question – is space profitable?
Don’t start booking a flight to Mars just yet
The only real exposure investors have had to space over the past years has been through defense and communications companies. But with many new entrants in the space exploration business, it’s only a matter of time before investors will be able to directly invest in space endeavors.
Other than scientific pursuits, defense and communications satellites, some are now looking to asteroids as the next big economic boom. Asteroid mining may sound like the realm of science fiction, but there are actually a number of companies working on just that. Ventures such as Deep Space Industries and Planetary Resources are looking at mining asteroids within the next decade.
There have been a number of reports suggesting that even a single asteroid has enough gold and platinum to equal a trillion dollars or more, but investors shouldn’t put much stock in the idea of mining metals in space. If a company were to mine an asteroid for precious metals, they would bring back so much that it would essentially crash the market, making the metal worthless.
The alternative would be to slowly dole out the metal to avoid crashing the market similar to how diamond companies operate. The problem with that is the cost needed to launch into space and mine an asteroid makes that plan nonsensical compared to just opening up a mine here on Earth.
The real value of asteroid mining is water – something essential for long term sustainability and fuel in space exploration. But in order for asteroid mining to become a profitable business, there needs to be some type of space infrastructure already in place. There needs to be a demand for outer space waystations and refueling depots.
As launch costs keep diving lower, more possibilities open up for businesses interested in outer space ventures. One real possibility is real estate. As technology advances, setting up permanent colonies in space, on the moon, or even Mars is going to be inevitable. Experimental systems like Asgardia, the first self-named “space nation,” could become a reality in the next few decades.