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Mining Helium-3 on the Lunar surface

A Business Strategy and Analysis. Mining Helium-3 on the Lunar surface. Collin Bezrouk Sam Moffatt Mike Zwach Aaron Olsen James Thomas Elizabeth Kenneick Christine Fanchiang Julia Freeburg. Agenda. Applications and Problems of He 3 Solution and Concept of Operations

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Mining Helium-3 on the Lunar surface

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  1. A Business Strategy and Analysis Mining Helium-3 on the Lunar surface Collin Bezrouk Sam Moffatt MikeZwach Aaron Olsen James Thomas Elizabeth Kenneick ChristineFanchiang Julia Freeburg

  2. Agenda • Applications and Problems of He3 • Solution and Concept of Operations • Barriers of Entry • Pressure from Substitute Products • Bargaining Power of Buyers and Suppliers • Government / Industry Competition

  3. Applications of He3 in Industry • Medical Research • Sub 1K cryo-cooling • Laser research, Lung imaging, etc. • Fusion Energy Research • Highly sought by researchers • Clean energy, no radioactive byproducts. • Geological Surveying • Finding oil well or other mineral deposits • Road construction • Homeland Security • Security scanners in airports • Precision instruments in guided missiles

  4. Problems Obtaining He3 • 0.000137% of Helium on Earth • Current Costs: $7,000/gram • Demand: Increased 10x in 7 years

  5. Solution to He3 shortage Problem:Helium 3 is an expensive and scarce material with a growing demand in multiple industries. Solution: Extract Helium 3 from the lunar regolith and transport it to the Earth.

  6. Concept of Operations: Extraction

  7. Concept of Operations: Transportation

  8. Threat of Entry: Economies of Scale 1. Finding H3: LOW: Academic work underway since 1986 • Mine Layout: LOW: H3 in upper regolith, easy access • Mine Equipment / Processing: VERY STRONG: $$ to develop and transport • Transport to Market: VERY STRONG: Not now available Overall, Very Strong Barrier of Entry to Market favors Large Companies such as Oil & Gas companies with existing process and funding for exploration and prospecting

  9. Threat of Entry: Capital Requirements • Development costs: (High) • Strongestbarrier is by far the rover and excavator costs ($3.5 Billion) • Transportation costs: (Medium/High) • Possibility of being a significant barrier ($80-125 Million/launch) • Operations costs: (Low) • Shouldn’t be a significant barrier based on established communication and helium distribution techniques

  10. Threat of Entry: Government Policy • We would have a monopoly on He3 (High) • Competition encouraged and required. • He3 is not on the open market. (Med) • The DOE might assume control over the distribution, limiting our market to government purchases. • Must adhere to refinement and containment standards. (Low) • Outer Space Treaty states that nobody owns the moon (Med) • Could apply to Lunar resources and utilization

  11. Force 2: Intensity of Rivalry among existing competitors • Small number of firms in market, low initial competition. • Russia currently has largest stockpile of He3, though their supply is limited. • Market unstable due to short supply and limited number of market participants. • He3 on the moon provides nearly unlimited source • He3 a commodity with a falling supply, yet growing demand. • High strategic stakes to be the initial operation on the lunar surface.

  12. Force 3: Pressure from Substitute Products • Overall assessment: Low • Substitutes: • Terrestrial Sources • Natural Decay of Tritium -decades • Recycling • Extraction from natural gas, atmosphere - limited • Technological Sources • Technology advancements • reduction of sensitivity and introduction of toxicity

  13. Force 4: Bargaining Power of Buyers • Overall Assessment: Medium/Low • Buyer groups: (in order of most to least influential) • Scientific Community (particle accelerators, cryogenics, research) • Government (cryogenics – navigation/guidance of missiles, munitions, land vehicles) • Neutron Detection (homeland security) • Non-Government uses (medical uses)

  14. Force 5: Bargaining Power of Suppliers • Supplier labor: highly-skilled workforce, but overall not a major influence to supplier demands • Suppliers are powerful, but also have a strong incentive to provide low-cost reliable product(s). • As market matures the power of suppliers would decrease because more suppliers would be able to enter the market.

  15. Government as an Industry Competition Force • Industry is concentrated • DHS could be 80% of purchases • Gov’t is in a power position because they have access to information about what the industry is doing, how they are doing it, and at what cost

  16. Summary

  17. Questions?

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