A week that resembled a battlefield, rather than the beach like affair wished for by market participants with a pina colada in hand and sun screen awaiting application, comes to a welcome end. The week closes with a “risk on” attitude with the market bidding up bond prices, rushing to cover their shorts ahead of the long UK weekend and of course August month-end. Even out of favour commodity markets are seeing more buyers than sellers with the Commodity Research Bureau index (CRB) bouncing a few points from the lows, although barely making an indentation in the fall of over 16% over the last twelve months.
However, before we rush out to buy into the weak metals markets it is worth taking a note of the latest speculative boom in investment, yes you got it, “Space Mining”. At least two companies so far have plans to mine in space for precious metals most notably platinum. The co-founder of one of the companies investing in Space Mining estimates that a single asteroid 30 meters in diameter could yield as much as $50bn of platinum. Now we wouldn’t rush out and short platinum just now on the back of this but reports say that there are over 13,000 near earth asteroids and around three a day are being identified that could be mined.
There is however another argument to what could develop into a trillion dollar industry. A recent Harvard University report concludes that a grand total of ten near earth asteroids may be worth mining, however most are too far away or too small and economically unfeasible. They add that asteroids have variable surface conditions, unstable interiors and negligible gravity which would require some extremely novel technology. Of course the mining companies disagree totally with the report and continue to seek investors; something to consider over the long weekend.