Mining Water on the Moon Economic Study Estimates Value at US$206B Over 30 Years

Lunar water study. Credit: Watts, Griffis and McOuat Limited (WGM).

Watts, Griffis and McOuat Limited (WGM), a well known Toronto based geological and mining consulting has released a conceptual economic study on mining water on the moon.

It’s not science fiction anymore

The study’s introduction starts off like this, “’intellectually interesting but science fiction’ is the typical response we have seen when discussing the possibility of exploiting resources in space. “

The authors then state that “future operations to be successful must be based on sound science and technology combined with robust economics.”

And with that we’re off to a good start. They key to mining resources in space must be predicated on sound science, technology advances and a workable economic model.

WGM then provides an estimated value for the market over the next 30 years, US$206 billion.

In making this estimate they say “after extensively analysing currently known technologies and extrapolating possible Moon-based production methods, WGM believes producing water on the Moon to be viable and the first company to exploit this identified demand will likely reap extraordinary profits.”

What’s the demand for water?

The study then delves into how they made their estimate. They broke down the need for water into seven areas;

  • Satellite Refuelling
  • International Space Station
  • Gateway Space Station (Now known as the Lunar Gateway)
  • Moon Base
  • Mars Space Station
  • Space Agriculture
  • Tourism and Hotels

Three areas on the list stand out to me as possible near term (10 years) possibilities; Satellite refuelling, supplying the International Space Station and the Lunar Gateway. You could possibly add in other space stations, government (China) or private (NanoRacks Space Outpost).

The tables below provide their calculated demand summary for water for the various areas.

Water demand summaries.
Water demand summaries. Credit: WGM.

How do you mine water on the moon?

The study also looks at existing technology mining technology. For the purpose of the study they would use the Regolith Advanced Surface Systems Operations Robot (RASSOR) Excavator developed by NASA.

While the technology has been tested successfully on Earth, it has not been tested on the moon. To deploy and use five of these units, they estimate a cost of US$800 million. Annual operating costs are estimated at US$2.5 million and WGM assumes “a maintenance and resupply mission will be required every 2.5 years and costs US$100 million per trip.”

They also discuss where they would mine saying “for the purposes of WGM’s analysis, we have assumed that water to be mined and processed will be in the form of either unconsolidated regolith containing water frosts or unconsolidated hydrated minerals in regolith located in an accessible nearly permanently shadowed region such at the base of a crater rim, cliff, valley or other feature proximal to a sunlight exposed region.”

The bottom line

As stated before, WGM estimates the value for the market over the next 30 years at US$206 billion.

In their economic summary they state the “water produced on the Moon has a current value of US$10 million per tonne, this value being based on the current costs to supply it from Earth. WGM estimates that water can be mined and processed on the Moon for around US$0.5 million per tonne. Even if our estimates of costs are off hundreds of percent, this still represents substantive gross margins for producing companies.”

They further state “based on the proposed small-scale mining operation, producing a modest 245 T/yr., annual cashflow from operations would be US$2.4 billion annually. Assuming a monopoly position for 10 operating years from an initial capital outlay of US$1.16 billion, a stable price for water, and an 8% discount rate, the Net Present Value of the operation would be US$15.1 billion with an IRR (Internal Rate of Return) of 211.3% and payback period of 0.5 years.”

In their conclusion they then state “conceptually, WGM’s analysis of the space-based water market shows both economic and technical potential to create a space-based mining operation. Although our analysis does not conform to terrestrial standards for technical reporting, we have attempted to employ similar methodologies in creating our model. WGM trusts our work will assist future efforts to open up new ventures in space.”

The keyword in this economic study is conceptual. If humanity is to live in space, even if it’s just in low Earth orbit and in the vicinity of, and on the moon, the use of in-situ resources will be critical to any long term or permanent presence. Taking the idea from concept to reality is what several companies are trying to do. This economic study provides a short and good introduction to the concept of mining water on the moon to be used in educating those people who want, or need to, learn more on the topic.

WGM_Conceptual_Space_Mining_Study_and _Business_Case_Final_2019

About Marc Boucher

Boucher is an entrepreneur, writer, editor & publisher. He is the founder of SpaceQ Media Inc. and CEO and co-founder of SpaceRef Interactive LLC. Boucher has 20+ years working in various roles in the space industry and a total of 30 years as a technology entrepreneur including creating Maple Square, Canada's first internet directory and search engine.

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