Commercial Considerations for Space Resource Utilisation in the Context of Mining Feasibility Studies

Space Resources Utilisation (SRU) is essential for the development of a cislunar economy, helping mitigate the impact of the ‘tyranny of the rocket equation’ by reducing the cargoes and fuel transported out of the Earth’s gravity well. Early activity could be driven by national entities, however for the long term sustainability of SRU, the involvement of the commercial sector will be paramount. There is limited prior research into the requirements of the commercial sector with respect to SRU. This thesis investigates several commercial considerations that may need to be resolved ahead of the large scale involvement of the commercial sector. This is done through the prism of the feasibility study process typically used in evaluating terrestrial mining projects. The practicality of the safety zone mechanism proposed in the Artemis Accords to govern the surface activities of large scale commercial lunar SRU in the absence of a licensing regime, is explored. The conclusion reached is that the safety zone mechanism, together with existing international law, would not be practical for such activity. Potential investment hurdle rate requirements for commercial involvement in SRU are investigated, with a hurdle rate range around 25% being proposed, along with the use of a standardised discount rate of 10%. A mechanism, the Risk Build Up Method, is developed to assist in determining appropriate investment hurdle rates. This correlates project based commercial risk scores with a hurdle rate risk premium to generate indicative hurdle rates. The thesis investigates the potential monetary benefits generated by, and possible impacts of, a royalty type mechanism on a hypothetical commercial lunar ice mining project, concluding that the impacts of such a mechanism could be significant, with the benefits generated being immaterial on a global basis. Evolving from the conclusions of this investigation, the thesis explores an alternative mechanism for monetary benefit sharing from commercial SRU, with the aim of minimising the impacts on commercial SRU projects. This resulted in the development of the Space Resource Fund, a proposal for a mechanism to both invest in an emerging commercial SRU domain and generate material monetary benefits from such activity over the long term.

Grantor dc:publisher

UNSW, Sydney

Year dc:date

2025

Author dc:creator

• MCKEOWN, Ben

• space resources
• SRU
• ISRU
• anzsrc-for: 40 ENGINEERING

Statement dc:rights

• open access
• CC BY 4.0
• free_to_read

Licence

• https://purl.org/coar/access_right/c_abf2
• https://creativecommons.org/licenses/by/4.0/

Language dc:language

en

Identifier

https://doi.org/10.26190/unsworks/31179

OAI identifier oai:identifier

oai:unsworks.library.unsw.edu.au:1959.4/105050