There will be no analysis next week as I am taking a short break.
A lot happened in the realm of commercial space last week. Probably the most widely covered news story is the announced merger of Eutelsat and OneWeb. While there are all sorts of parallels, possibilities, and problems with that merger, I won’t cover that in this analysis. It is worth contemplating for a future article, however. So instead, I’ll focus on a story that Eric Berger brought up in his “Rocket Report” weekly news round-up. It is about the Romanian company ARCA and its plans for asteroid mining. It’s just too odd to skip.
Before starting, it’s worth noting that while ARCA’s plans in its white paper are the focus of this analysis, other space companies (and companies generally) are guilty of similar sins. Lessons can be drawn from the marketing those companies pump out, with no evidence of any progress in their plans. Whether inspired by sincere or opportunist motivations, the messaging these companies introduce muddy the water of the commercial space industry. How does a person understand, much less judge, whether those products/services can succeed? Further muddying the water is that ARCA is different from those other companies: it has produced results for various projects. However, ARCA seems to have abandoned its smallsat rocket efforts and moved on to something that creates more questions than provides answers.
Last week the company posted a white paper (nearly 300 pages) which is, to be polite, unfocused. While the paper’s topic is supposed to cover asteroid mining, there’s an underlying defensive tone. Some paper highlights include the regaling of ARCA’s founder being charged, arrested, and cleared of fraud; conspiratorial messaging about Romania’s government propaganda; Romania’s civil aviation agency canceling proposed company test launches; and the wacky CAD images of a hexagonal bundle of rockets launched from the water. It may be that the defensive tone accounts for much of the overexplaining within the white paper.
These are plans (somewhat). ARCA has no operational rocket. It has no operational mining capability. It might test its demo rocket…soon, perhaps. ARCA touts its launch system’s configuration and low environmental impact as industry innovations. Do ARCA’s innovations answer a problem?
Well-known business management and innovation expert, Peter Drucker, observed:
“Innovation is the specific instrument of entrepreneurship. It is the act that endows resources with a new capacity to create wealth. Innovation, indeed, creates a resource.”
In the same book, he also wrote:
“Successful entrepreneurs do not wait until “the Muse kisses them” and gives them a “bright idea” they go to work. Altogether, they do not look for the “biggie,” the innovation that will “revolutionize the industry,” create a “billion-dollar business,” or “make one rich overnight.” Those entrepreneurs who start out with the idea that they’ll make it big—and in a hurry—can be guaranteed failure. They are almost bound to do the wrong things. An innovation that looks very big may turn out to be nothing but technical virtuosity…”
Is ARCA’s billion-dollar plan innovative (creates a resource) or a showcase of technical virtuosity (curiosity?)? The company would love for people to believe that it is the former as it estimates a very low launch price for its system. But ARCA’s presentation makes it appear as if it’s the latter. Its proposed schedule is incredibly optimistic since it requires a manufacturing infrastructure it doesn’t have. Its business model, the selling of rare metals/minerals mined in space to companies on Earth, isn’t fleshed out (however, the rocket systems are very detailed). The paper also downplays customer needs as a driver for its business, instead pushing forward its undeveloped mining business as the reason for developing a new launch system.
The paper describes ARCA’s Asteroid Mining Program (AMi) and explains why the company is taking that direction. The company’s ten-year goals (starting in 2022) for AMi are:
- Conduct asteroid mining regularly
- Build an orbital depot
- Achieve $1 billion in mining revenues by 2031
- Use 10% of the revenues ($100 million) for aiding the poor worldwide
Those are ambitious goals for a company without a rocket, space communications relay network, and mining spacecraft. The company seems to be giving up on its earlier efforts to compete commercially with other launch providers, moving on to asteroid mining instead. The company estimates it could earn ~$85 million for the mined materials each mission brings back. Each mission will be around 172 days. If the company is hinting that the $85 million is considered revenue (doubtful), then it would take about 12 missions to add up to $1 billion. It will likely take more missions to get to the $1 billion revenue mark, however.
I won’t go into the technical feasibility of the ideas the white paper is bringing forward, other than to note that the proposed launch configuration of ARCA’s EcoRocket Heavy is unconventional. If Elon Musk (or Tory Bruno, for that matter) had imbibed in a bit of ayahuasca, and then chose random rocket configurations in Kerbal Space Program, the result might still fall short of the rocket ARCA presents in its paper. Additionally, ARCA’s 32-meter wide rocket system will launch from seas and oceans, similar to the proposed launch method from Ripple Aerospace.
According to the paper, ARCA chose the configuration to keep rocket development and launch costs low. ARCA states that launch industry innovation is limited, at least where legacy launch operators are concerned, because new vehicle development and launch operations are expensive and that the rockets from those operators aren’t environmentally sustainable. In addition, the company believes rocket manufacturing and launch operations are complex, making them expensive. The complexity comes mainly from the propellants rockets use. ARCA notes that not using the typical rocket propellants and avoiding complexity will go a long way towards lowering costs. Again, ARCA is pushing this narrative for why innovation is limited in the launch industry.
ARCA also pushes the idea that it is an innovative company in space launch, perhaps more innovative than SpaceX. While SpaceX, for example, is innovating with its Falcon 9 and Starship rockets, ARCA believes those innovations merely extend the life of an old space launch technology. This is why the company designed its rocket the way it did, and perhaps why it thinks it’s more innovative. Instead of a single, long, large diameter tube, ARCA proposes to use many smaller diameter short tubes (540 1.2-meter diameter rockets), bundled together in a 32-meter diameter (?) hexagon. It’s not clear why the company considers the system, which still uses basic rocket propulsion from the ends of tubes pointed down at the Earth, as innovative.
The system seems more complicated than a single rocket, which, using ARCA’s logic, should mean it’s more expensive to manufacture and launch. It would be interesting to see the component tradeoffs the company made that led to its conclusion that so many more engines somehow decrease complexity. Still, the company pins the projected launch cost to convey a 24-ton payload to low Earth orbit using the EcoRocket Heavy at $5.06 million. While low cost by itself isn’t considered innovative, EcoRocket’s per kilogram cost of ~$211 is extremely low. The company’s launch estimates don’t make sense as the cost of each propulsion module added together exceeds them.
While ARCA says the PMs are reusable, it doesn’t provide a limit to the reusability, which should be considered when calculating those costs. Based on the projected per kg cost however, if the system were reliably operating today, that cost and the rocket’s capability would be appealing to a few potential customers. That is, if the system focused on getting customers (the word “customer” is used only three times in the paper). Maybe not having paying customers is an innovation?
ARCA highlights the lack of focusing on customers as the driver for the design difference of EcoRocket Heavy: it’s only built (and therefore optimized) to serve the company’s asteroid mining project. ARCA notes that the other launch companies are hobbled by the fact they have to serve “third parties” (customers, I think–pg 46). According to the company, the needs of those third parties drive rocket development and operations costs. The company seems to indicate that without those pesky customer requirements, ARCA can design the perfect rocket for the perfect payload while keeping costs low.
Raspberry, Vanilla, or Mixed?
While the phrase “self-licking ice cream cone” was not meant to describe a single space business, it appears to be the best description of ARCA’s suggested business model for AMi. It’s a lot of effort for a mining operation and one that seems low yield for ten years of effort. Because the company is siloing its business, its low launch costs, while helpful in launching its spacecraft, are only part of ARCA’s much more significant challenges.
For one, the company needs to build a factory that can manufacture 540+ propulsion modules for just one EcoRocket Heavy. Setting up a factory is a challenging thing that takes time. The factory should be able to build at least one PM per day, starting now, to meet that timeline. I am not sure any current rocket manufacturer claims the ability to build one rocket per day. ARCA seems to think manufacturing PMs is more straightforward, so perhaps that helps. However, to build a factory with the ability to quickly manufacture small rockets solely to support the company’s mining operations seems restrictive, cutting off opportunities from “third parties.”
The company also needs a factory to build its mining spacecraft. Based on ARCA’s description of them, they are much more complex than building LEO broadband satellites. That complexity usually increases time and cost. In addition, ARCA would need to build more than one mining spacecraft to meet its deadline. Those are some significant challenges, and there are more the company needs to address just to support building the rockets and spacecraft. ARCA’s description of its history in the white paper shows it to be a company of one-off projects. The lack of mass manufacturing in that history does not bode well.
None of these are insurmountable challenges, but they do take time. Those wondering whether ARCA will succeed in reaching its AMi goals (if given enough funding) need to decide whether its system is a resource or something else. Proposing an alternative launch system and alternative propellant is still just a proposal, not evidence of innovation. It’s seeking resources, money, to get those systems running. Based on the white paper, ARCA will be its customer in this system, meaning the system itself seems inflexible to other needs. In other words, no one else will be able to (or want to) use the system, at least not without some modifications. It’s a resource-hole.
Mine (Immigration) Camp
As I end this analysis, I must note (as someone who writes papers) that ARCA’s AMi white paper is not something I would write. I certainly wouldn’t let the public see it if I had. A white paper’s purpose is to authoritatively inform the public of a problem and a possible solution (in ARCA’s case, a new launch system). For ARCA, it should be a marketing document focusing on AMi’s potential uses. It’s supposed to gain comments and interest.
While ARCA’s paper gained my interest, it wasn’t for the right reasons. As noted earlier, there is no focus. It’s a space oddity within a realm that’s already full of hyperbole and wishful thinking. ARCA’s white paper contains elements of Drucker’s “Muse” and “bright idea” but no actual innovation indicators. There is also that underlying defensive tone that does nothing to bolster an authoritative voice. The push away from launch customers seems to be an attempt to stave off uncomfortable questions of a potentially saturated smallsat launch segment.
Weirdly, the paper contains bits about the origin of ARCA’s plan that parallel Adolf Hitler’s jail time-inspired rantings captured in “Mein Kampf.” For example, according to the white paper, Dumitru Popescu, ARCA’s founder, wrote the following about being detained in a U.S. immigration camp:
“Looking back to the detention in the immigrant camp, although emotionally challenging, it was probably one of the best things that ever happened to me, because it gave me the opportunity to stop, to rest, it gave me the time to think and focus on how I’m going to restart ARCA. I was facing a severe loss of credibility after all those events, and I was left with only $300. So, while detained, it was clear for me that I need to somehow find a solution to restart ARCA, and to do it with those $300 from my pocket.”
Popescu’s story and ARCA’s white paper might be an inspirational demonstration of the doggedness required to be an entrepreneur. Or they could be a cautionary tale.