Space mining, extracting resources from near-earth asteroids, is “not science fiction any more.”

With these words, spoken by Jean-Jacques Dordain, the former director general of the European Space Agency, Luxembourg announced its entry into the space-mining race.

Dordain was appearing alongside Etienne Schneider, Luxembourg’s economy minister, as he unveiled the country’s bid to be a pioneer in a whole new resources sector, one with quite literally infinite potential.

That the small Duchy of Luxembourg should be challenging the current dominant player in space exploration, the U.S., might initially appear surprising.

But in truth it is only building on its historical role in pioneering satellite technology. In 1985 it sponsored SES, which is now the world’s largest commercial satellite operator.

And while asteroid mining really does sound like science fiction, much of the groundwork has already been laid.

Private operators such as Planetary Resources (PRI) and Deep Space Industries are getting in on the action, chasing the promise by U.S. astrophysicist Neil deGrasse Tyson that, “the first trillionaire, in the world, is going to be the person who first mines asteroids.”

PRI is, ambitiously maybe, aiming to be commissioning mines within five years.

Indeed, a greater challenge to space mining than the technology might be the absence of any legal framework.

In layman’s terms, the question is, whose asteroid is it anyway?

What’s Mined in Space Stays in Space

Quite evidently given bombed-out prices, the last thing most mining companies want right now is more minerals, let alone stuff that has been sourced from space.

They can rest assured that asteroids are not going to add to an existing glut of industrial raw materials such as iron ore any time soon.

NASA’s Osiris-Rex mission to the Bennu asteroid, scheduled for launch later this year, will cost $800 million and bring back a maximum two kilograms of sample.

On that economics no-one is going to be flooding an already flooded iron ore market any time soon.

Rather, the short-term prize of asteroid mining is to extract resources that will then be used to manufacture in space itself more space platforms, spacecraft and satellites.

Metals such as iron, cobalt and nickel are abundant in asteroids and critical components for space vehicles. Platinum group metals, also abundant, can be used for internal circuitry and electronics.

But the real holy grail will be the frozen ice on many asteroids, which can generate both hydrogen for fuel and oxygen for…well that’s pretty obvious, isn’t it?

The biggest component of operating in space is that of launching rockets from Earth, around $100,000 per kg of material, according to NASA.

“Mining these materials from asteroids will therefore spawn an entirely new industry in space mission services by replacing Earth-sourced materials with those from space and dramatically reducing commercial space-development costs,” according to Accenture.

If anything, asteroid mining might be a net positive for Earth-bound miners and equipment suppliers.

Again to quote Accenture, “both traditional mining and asteroid mining are intently focused on autonomous operational capabilities in very harsh environments.”

Think Rio Tinto and BHP Billiton’s experience in autonomous excavators and transport systems already deployed for iron ore mining in Australia’s Pilbara.

It’s not surprising therefore that Bechtel, the U.S. equipment giant, has invested in and partnered with PRI. Another investor is 3D Systems, a specialist in 3D printing for manufacturing.

The future goal may well be, as Luxembourg’s Schneider told a press conference, to bring rare minerals back to Earth to fill “an ever-increasing scarcity,” but more immediately what’s going to be mined in space is going to stay in space.

Get Your Hands Off My Asteroid!

But the catch is that, to quote Rachael O’Grady, senior associate at law firm Mayer Brown International, “there’s simply no legal framework” for private operators to mine asteroids.

Ms O’Grady, who has cut her legal teeth in the satellite sector, is one of a growing number of lawyers calling for an international accord on space mining equivalent to the International Seabed Authority, which has jurisdiction over non-territorial waters.

Space law is dominated by the 1967 Outer Space Treaty, written and ratified at the time of the Cold War and therefore heavy on the prohibition of weapons of mass destruction in space, on the Moon, or any other “celestial body.”

The treaty explicitly forbids any government from claiming a celestial resource such as the Moon or a planet on the basis that they are “the common heritage of mankind.”

So when Neil Armstrong planted the U.S. flag on the Moon back in 1969, it was a purely symbolic gesture. The U.S. doesn’t “own” the Moon.

The Moon Agreement of 1979 was an attempt to extend the provisions of the previous treaty to the exploitation of any celestial body, including asteroids.

Any such body and its natural resources are also “the common heritage of mankind” and can’t be owned by any state or non-state body.

The only problem was that while 104 countries signed up to and ratified the 1967 treaty, only 16 did so to the Moon Treaty. They include countries such as Austria, Kazakhstan and Uruguay, but, critically, none that have space exploration capability.

The legal waters got a lot hotter last year with the U.S. Space Act, which allows “U.S. citizens to engage in the commercial exploration and exploitation of space resources” but not “biological life.”

If you find an alien, in other words, you’re not allowed to keep it, assuming that it’s not a lot more evolved than humans and doesn’t want to keep you.

This is where Luxembourg comes in.

“Luxembourg is the first European country to announce its intention to set out a formal legal framework which ensures that private operators working in space can be confident about their rights to the resources they extract,” according to the formal press statement issued on Feb. 3 this year.

The country said it is “eager to work with other countries” on a multilateral agreement on asteroid rights, but the prospect of several countries passing their own legislation raises the specter of space mining becoming a new wild west land grab.

A somewhat dystopian view not helped by Schneider’s comparison of space mining to fishing, whereby “fishermen own the fish they catch, but they do not own the ocean.”

So if you still think asteroid mining is science fiction, consider the very earthy prospect of the first would-be trillionaire immediately being sued by just about everyone else.