Above page content

    Site map  Cookie policy

Beijing and Washington race to mine the Moon

In the 1960s, political rivalries between America and Russia propelled humanity to the Moon. Today Washington’s main rivalry is China – and the Moon is their sights again.

In the 1960s, political rivalries between America and Russia propelled humanity to the Moon. Today Washington’s main rivalry is China – and the Moon is their sights again.
Garry white employee

by
Garry White

15.05.2020

Without a battle for ideological supremacy between Moscow and Washington, the technological race that ended with Neil Armstrong’s ‘one small step’ may not have happened at all. Now, as a new cold war with China beds in, the cosmos is once again in play. But this time it’s not only about national pride and superiority – it’s more about the money.  

A month ago, Donald Trump signed an executive order that cleared the way for US companies to start mining in space without any international-agreed treaty governing their behaviour – a move decried by Russia as “space colonialism”.

Last week, we got a glimpse of the administration’s plans to allow American diggers and drillers to mine asteroids and the Moon – and why President Trump thinks the opinion of other nations doesn’t really matter.

Strategic importance

Exploiting lunar resources and building a staging post to Mars are now a key part of America’s geopolitical strategy. The ‘barren’ Moon is really a commodity sweet shop – with significant deposits of gold, iron, magnesium and titanium.

Also buried below the surface are believed to be significant deposits of some of the most strategically-important elements that are expected underpin the economy of the future. These include rare-earth metals (REMs) which are essential in technologies used in smart phones and batteries for electric vehicles, but also act as key components in smart-weapons systems and medical-imaging machines.

Currently, China has about 85% of the global processing capacity of these REMs, with the nation supplying 80% of imports to the US from 2014 to 2017. This provides a powerful lever for Beijing in any trade dispute. The Communist Party has already threatened to put restrictions on exports of these key metals as part of the dispute, a move that would put many US businesses in a tricky situation when stockpiles run out.

The future of power

Then there’s the quest for cheap, clean energy. “Unlike Earth, which is protected by its magnetic field, the Moon has been bombarded with large quantities of Helium-3 by the solar wind,” the European Space Agency explains. “It is thought that this isotope could provide safer nuclear energy in a fusion reactor, since it is not radioactive and would not produce dangerous waste products.”

The US Energy Department (DoE) has supported research into fusion power for decades. Fusion is the process that powers the sun and the process involves forcing two atoms together to release a large burst of energy. In a fission nuclear reactor, such as the ones in operation today, atoms are split to generate power.

Nevertheless, this is an unproven technology. Human-engineered fusion has been demonstrated on a small scale, but the process needs to be commercial, efficient, economical, and environmentally benign.

Doing deals preferred

One major feature of the current presidency is the administration’s contempt of multi-national institutions and a preference for bi-lateral agreements. Donald Trump is a dealmaker – believing that two representatives in a room can hammer out an agreement that suits them both – but anything produced by a committee will result in an unsuitable compromise for all. This drives the president’s dislike of organisations such as the United Nations, World Health Organisation – and especially the European Union.

This preference for doing individual deals mean the US has now developed something they call the Artemis Accords, named after NASA’s Artemis programme, which aims to return astronauts to the lunar surface by 2024. Details of these proposals have now started leaking out of Capitol Hill and the accords make it clear that the administration will still oppose the 1979 Moon Treaty. This was a multilateral treaty that attempted to ensure all activities on celestial bodies would conform to international law, including the United Nations Charter. America has never ratified this treaty.

Staking their claim

Instead, of negotiating the details with partners, the US will discuss the accords separately with current space partners including Canada, Japan, and European countries such as the UK. The Trump administration is targeting countries with “like-minded” interests in mining the lunar surface. Russia, despite its involvement in the International Space Station, will not be included.

To deal with any disputes, Washington proposes “safety zones” around Moon bases to prevent “interference or damage” from any rival. This sets the scene for a Californian-style “gold rush” for the Moon – with the US and its allies leading the charge.

Obviously, China is not going to sit idly by as American companies ‘stake their claims’. At the start of last year, China landed a robotic rover on the far side of the Moon, the first such landing in history. China’s space programme is a force to be reckoned with and it is geared to support “economic and social development,” according to the Information Office of the Chinese State Council. Mining the Moon is a central aim of the programme. NASA’s stated aims are not as an arm of state economic development and is focused on “space exploration and scientific discovery”.

Just as China’s state-directed companies managed to outgun the US in their development of 5G infrastructure, Beijing hopes to do the same in space. Mining the Moon will be a technical and engineering feat, but the potential returns are, as they say, astronomic. The war for economic and ideological supremacy between China and the US will define the rest of this century. Both sides see it as an existential battle. Without such fierce rivalry, the quest to mine the Moon would be much more pedestrian. Now a clash of civilisations is turning it into a critical mission.  

A version of this article first appeared in Saturday’s Daily Telegraph.

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

Get in touch

Find out more

Our focus on clients has endured since the foundation of Charles Stanley in 1792 and has helped make us one of the UK's leading wealth management firms. Your interests give shape to everything we do.

Please call us to talk about your circumstances or complete the enquiry form.

020 3797 1783

Make an enquiry

If you have some questions we'd be happy to help.

Get in touch

Coronavirus (COVID-19)

Our latest information

Stay updated

Subscribe to our weekly email newsletter.

Subscribe here

Local Office

Your local office

Your local Charles Stanley office can help advise you on a wide range of investment management services.

Select an office

Share

Newsletter banner signup