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 US, 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 Inc. (PRI) and Deep Space Industries are getting in on the action, chasing the promise by US astrophysicist Neil deGrasse Tyson that, “the first trillionaire, in the world, is going to be the person who first mines asteroids”. (Interview at the 2014 South-by-Southwest festival).

PRI is, ambitiously maybe, aiming to be commissioning mines within five years. (“Courage or Capital; the final obstacles for sustainable asteroid mining” - Accenture) 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?

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 kilogrammes 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.