The Price of Stardust

Platinum is a metallic element with the atomic number 78. Platinum is most commonly used in catalytic converters and jewelry for those that feel gold is too cliché. Due to Platinum’s relatively high density it is one of the rarest elements in the Earth’s crust. That combination of utility, shiny, and scarcity also means platinum goes for over $1400 an oz.

That astronomical price tag is why a dream team of space investors met in late April at Seattle’s Museum of Flight to announce the launch of a firm called Planetary Resources with the stary-eyed goal of mining asteroids, which are theoretically chalk full of platinum and other rare earth elements. The investors include Peter Diamandis, Eric Anderson, Larry Page, Eric Schmidt, Charles Simonyi , and James Cameron; or in terms of their resume: the creator of the X-Prize, the founders of Google, a former Microsoft lead programmer, and the father of the fraking terminator. While their entire business structure rests on still theoretical/fictional technologies, with that much brain and financial power working together I think we should all take this plan seriously.

Not everyone shares my optimism regarding this project. Critics state that if one successfully begins mining asteroids for precious rare-earth elements, these resources will no longer be scarce, thus decreasing their price and ultimately destroying the original motivation for asteroid mining. While this is somewhat true, it’s a bit of an overly simplistic critique.

It is basic economics that in the short-run if one increases supply, the price drops.  I’m not disputing that. However, the real word is not so static. Supply and demand possess a more dynamic relationship then that. When the price of these materials fall, that will spur interest and innovation. Current global production of platinum is only 30 tons a year; palladium 24 tons, rhodium and iridium a mere 3 tons each. A lower price means that more engineers and scientists will have access, enabling them to develop new uses for these materials. Eventually these new uses will result in an increase in demand, gradually pushing the price back up. Thus this is actually a fairly sound business venture.

Economic arguments aside, I think this an amazing idea. Sure it’s crazy, but it’s crazy in that fantastic we-can-do-anything-we-want way that the US used to specialize in. In 1961 Kennedy said we’d go to the moon, 8 years later we did! Somehow over the years we as a nation have lost this brilliant insanity. I think it’s time we took it back and I applaud Planetary Resources for leading the charge.