As the world's population grows along with the demand for the planet's limited resources, governments and private enterprises are setting their sights on outer space.
In asteroids and on the moon, there is an abundance of water, base metals, and precious metals. Once the stuff of science fiction, people are now actively working to develop the technology to extract and utilize these resources. These efforts will almost certainly be led by companies in the aerospace, defense, and government services (ADG) industry sector.
Although there is a growing consensus among spacefaring nations that commercial space mining is consistent with international law, companies and their investment partners will likely require some additional legal clarity before undertaking a space mining venture. Specifically, they will likely want to address the same key legal risks that are considered before a terrestrial mining venture. These include:
- Security of tenure: Can the mining company secure the legal right to explore for and develop the mineral properties?
- Fiscal regime: What economic burdens, such as taxes, royalties, and export duties will apply to the mining venture?
- Bankability: Does the legal and commercial regime applicable to the mining venture allow investors to finance the project?
- Enforceability: Are the agreements, licenses, concessions, and legal commitments enforceable, and is the project relatively safe from expropriation or naturalization?
Below, we examine the promise of space mining and the challenges presented by the current state of space mining law.
Space resources basics
Asteroids are the 4.6 billion-year-old remains of the formation of our solar system. 1 They range in size from less than 33 feet to about 329 miles in diameter. 2 Most have odd, non-spherical shapes causing them to rotate irregularly as they orbit the sun. 3
Most asteroids orbit in the main asteroid belt between Mars and Jupiter. 4 This belt contains millions of asteroids, 5 but is so far away that it would be very difficult with existing technology to utilize their resources. Fortunately, "near-Earth asteroids" (NEAs) orbit closer to Earth. 6 NEAs are defined as having an orbital distance from Earth of 1.3 astronomical units (au) (equivalent to about 120 million miles) or less. 7 To date, scientists have documented over 20,000 NEAs and discover more every year. 8
Although different asteroid types are made up of different component elements, some contain significant amounts of platinum group materials and other valuable metals. 9 For context, it has been estimated that the value of a single platinum-bearing asteroid could be between US$25 and US$50 billion.10 These metals are highly useful and valuable, both on Earth and in space.11 As a result of Earth's gravity, much of our planet's supply of these metals is found near Earth's core, making the relatively smaller amounts that are more readily accessible in the crust layer even more valuable.12 By contrast, on asteroids, the lower relative gravity makes these metals easier to access.13
The moon also holds significant amounts of ice in craters located at the moon's south pole.14 Scientists estimate that within about 40 of these craters there are 1.3 trillion pounds or 600 million metric tons of waterice.15 Lunar ice can be converted to water and rocket fuel and the estimated deposits could be transformed into enough rocket fuel "to launch one space shuttle per day for 2,200 years."16 This makes the moon a very attractive option to house a space re-fueling station, and indeed, there are multiple proposals to this effect.
The nascent space mining industry is quickly becoming a viable reality. Many estimate that extracting and utilizing water in space, the first step to creating a space mining economy, could be achieved within a decade.17 However, there remains significant legal uncertainty about how mining the moon and asteroids can and should proceed under existing international and domestic law.
In addition to the technical and financial challenges, considerable regulatory uncertainty surrounds the space mining industry. The central unsettled questions are whether international law permits private ownership of space resources and relatedly, what, if any, international benefit-sharing the law requires. There are also certain regulatory gaps; for example, the absence of a dispute resolution framework. Still, it may be possible to move forward with the development of resources in outer space under existing laws and treaties. The remainder of this article describes the legal uncertainty surrounding the space mining industry and discusses what that uncertainty may mean for space mining entities.
Space mining law
Outer Space Treaty
The Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies (the Outer Space Treaty) is the foundational text of international space law.18 It entered into force in 1967 and has been signed and ratified by over one hundred nations, including the United States. While it deals in large part with preventing any one nation from gaining a military advantage in space, it also has significant consequences for commercial mining activity.
In relevant part, the Outer Space Treaty provides, "the exploration and use of outer space, including the moon and other celestial bodies, shall be carried out for the benefit and in the interests of all countries . . . and shall be the province of all mankind. Outer space, including the moon and other celestial bodies, shall be free for exploration and use by all States without discrimination of any kind, on a basis of equality and in accordance with international law, and there shall be free access to all areas of celestial bodies."19
Speaking directly to ownership of celestial bodies, the Treaty continues, "[o]uter space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means."20
While the Treaty makes clear that there is a right of free access to celestial bodies for all nations, it prohibits ownership of the bodies themselves. It also qualifies that space activities by private entities must be authorized and supervised by the appropriate nation. However, the Treaty does not deal clearly with whether space resource extraction is a lawful enterprise under its terms.
The Treaty's statement that the exploration and use of space "shall be carried out for the benefit and in the interests of all countries" is subject to multiple interpretations. While some have argued that this clause mandates an international profit-sharing mechanism, the United States and others have taken the position that it merely reiterates the right of free access articulated in Article I.21
Whether the prohibition on national appropriation extends to a grant of private rights over extracted resources is similarly contested. Specifically, there is some disagreement regarding whether private entities can own resources extracted from the celestial body without any nation owning the body itself. The Treaty includes the phrase "exploration and use" twice in its terms. The word "use" seems to indicate that leveraging space resources was within the contemplation of the drafters, and thus, not prohibited.22 Still, it is unclear how rights would be distributed where national appropriation is prohibited. The diplomatic history of the Treaty indicates that perhaps this point was left ambiguous deliberately in order to gain support across nations.23
The Moon Treaty
The Agreement Governing the Activities of States on the Moon and Other Celestial Bodies (the Moon Treaty) addresses resource extraction from the moon, and likely also applies to asteroids.24 As noted above, the Outer Space Treaty declares that the moon and other celestial bodies in the solar system, as well as their natural resources, are the "province of all mankind."25 The Moon Treaty goes further, characterizing the bodies and their resources as being the "common heritage of all mankind,"26 a phrase that some interpret to create a common interest in moon resources. The Moon Treaty has been signed by fewer than 20 countries and was not signed by the United
States or other space-faring nations.27 Some regard it as obsolete.28 In the event that there is a renewed international interest in the core provisions of the Moon Treaty, that treaty could present a significant barrier to private space mining.
U.S. Commercial Space Launch Competitiveness Act
In 2015 Congress passed the U.S. Commercial Space Launch Competitiveness Act. The Act is the consolidated outcome of four bills that expand existing regulation of commercial space activity.29 Most important, for space mining purposes, is Title IV, which establishes a basis for ownership of extracted space resources.
Title IV, the "Space Resource Exploration and Utilization Act," creates private property rights over resources extracted from space.30 It directs the President to (1) facilitate the commercial exploration
for and commercial recovery of space resources by U.S. citizens; (2) discourage government barriers to the development of such industries in a manner consistent with U.S. international obligations; and (3) promote the right of U.S. citizens to engage in such industries free from harmful interference.31
The Act then establishes that "[a] United States citizen engaged in commercial recovery of an asteroid resource or a space resource under this chapter shall be entitled to any asteroid resource or space resource obtained, including to possess, own, transport, use, and sell the asteroid resource or space resource obtained in accordance with applicable law, including the international obligations of the United States."32 It does not make clear how exactly a citizen should go about claiming rights to space resources. The use of the word "obtained" seems to indicate a framework akin to the rule of capture, but this is not specified in the law itself.
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1. "Asteroids: In Depth," NASA, https://solarsystem.nasa.gov/small-bodies/ asteroids/in-depth/ (last visited Nov. 5, 2019).
3. Charles Q. Choi, Asteroids: Fun Facts and Information About Asteroids, SPACE.COM (Mar. 16, 2017), https://www.space.com/51-asteroidsformation-discovery-and-exploration.html.
6. "NEO Basics," Center for Near Earth Object Studies, CALIFORNIA INSTITUTE OF TECHNOLOGY, https://cneos.jpl.nasa.gov/about/neo_ groups.html (last visited Nov. 5, 2019).
8. "Discovery Statistics," Center for Near Earth Object Studies, CALIFORNIA INSTITUTE OF TECHNOLOGY, https://cneos.jpl.nasa.gov/stats/totals. html, (last visited Nov. 5, 2019). Detailed information about asteroids can be found at www.asterank.com.
9. Asteroid mining: US company looks to space for precious metal, THE GUARDIAN (Jan. 23, 2013), https://www.theguardian.com/science/2013/ jan/22/space-mining-gold-asteroids .
10. Jim Edwards, Goldman Sachs: space-mining for platinum is 'more realistic than perceived,' BUSINESS INSIDER (Apr. 6, 2017), http://www. businessinsider.com/goldman-sachs-space-mining-asteroid-platinum2017-4?r=UK&IR=T (quoting Goldman Sachs analyst note) (observing that harvesting even one such asteroid "would instantly tank the entire platinum market" by flooding worldwide supply).
11. As of November 2019, platinum was priced at US$953 per ounce. "Platinum," https://markets.businessinsider.com/commodities/ platinum-price (last visited Nov. 5, 2019).
12. Robert Hackett, Asteroid passing close to Earth could contain $5.4 trillion of precious metals, FORTUNE (Jul. 20, 2015), http://fortune. com/2015/07/20/asteroid-precious-metals/.
14. Andrea Thompson, 'Significant Amount' of Water Found on Moon, SPACE.COM (Nov. 13, 2009), https://www.space.com/7530-significantamount-water-moon.html.
15. "NASA Radar Finds Ice Deposits at Moon's North Pole," NASA, https:// www.nasa.gov/mission_pages/Mini-RF/multimedia/feature_ice_like_ deposits.html (last visited Nov. 5, 2019).
16. Paul Rincon, Ice deposits found at Moon's pole, BBC NEWS (Mar. 2, 2010), http://news.bbc.co.uk/2/hi/science/nature/8544635.stm (paraphrasing comments made by Dr. Paul Spudis of the Lunar and Planetary Institute in Houston, Texas, at the 41st Lunar and Planetary Science Conference).
17. Mike Wall, Asteroid Mining May Be a Reality by 2025, SPACE.COM (Aug. 11, 2015), https://www.space.com/30213-asteroid-mining-planetaryresources-2025.html.
18. Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies, Jan. 27, 1967, 18 U.S.T. 2410, 610 U.N.T.S. 205 [hereinafter "Outer Space Treaty"].
19. Outer Space Treaty, Art. I (emphasis added).
20. Outer Space Treaty, Art. II (emphasis added).
21. See Mike Gold, Testimony of Mike Gold Before the Subcommittee on Space, Science, and Competitiveness of the Committee on Science, Space, and Technology United States Senate, at 7 (May 23, 2017), available at https://www.hsdl.org/?view&did=807259.
22. See Joanne Gabrynowicz, Testimony of Joanne Irene Gabrynowicz Before the Subcommittee on Space of the Committee on Science, Space, and Technology United States House of Representatives, at 7 (Sept. 10, 2014), available at http://joannegabrynowicz.com/wpcontent/uploads/2013/11/Gabrynowicz-Final-Testimony-H.R.-5063.pdf.
23. See Samuel Roth, Developing a Law of Asteroids: Constants, Variables, and Alternatives, 54 COLUM. J. TRANSNAT'L L. 827, 841–42 (2016).
24. Agreement Governing the Activities of States on the Moon and Other Celestial Bodies, Dec. 18, 1979, 1363 U.N.T.S. 3 [hereinafter "Moon Treaty"]; see also id. at 842.
25. Outer Space Treaty, Art. I.
26. Moon Treaty, Art. 11 § 1.
27. See Roth, Developing a Law of Asteroids, supra note 23, at 844.
28. See id.
29. U.S. Commercial Space Launch Competitiveness Act, Pub. L. No. 114-90, 129 Stat. 704 (2015) [hereinafter "Space Launch Act"]. For a complete analysis of the Act, see Michael Dodge, The U.S. Commercial Space Launch Competitiveness Act of 2015: Moving U.S. Space Activities Forward, 29 NO. 3 AIR & SPACE LAW. 4 (2016).
30. Space Launch Act §§ 402-403, now codified at 51 U.S.C. §§ 51301– 51303 (2015). Notably, the Act also clarifies that "[i]t is the sense of Congress that by the enactment of this Act, the United States does not thereby assert sovereignty or sovereign or exclusive rights or jurisdiction over, or the ownership of, any celestial body." Space Launch Act § 403.
31. 51 U.S.C. § 51302(a).
32. 51 U.S.C. § 51303 (emphasis added).
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