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Schematic overview of habitations and greenhouses zone of the colony.

Richard Heidmann, vice-president Association Planète Mars

Pierre Brisson, financial advisor and English translation

1 Introduction

1.1 The economic nature of a Martian colony

Will we see one day a real colony be set up on the Red Planet? Mars provides exceptional assets for this project but it also set constraints that test our expertise and our innovative capabilities. In a previous study which is available on our website, planete-mars.com, we considered the implications of such a challenge as far as the design of facilities and means of access are concerned. It looks that this project can come through only if it leads to a capacity of commercial supply; the selling of Martian products allowing the colony to finance its external spending, whether in terms of importing those assets (equipment or goods) that cannot be produced on Mars, or in terms of financial expenses (interest, rentals, capital instalments or dividends due).

Indeed it is clear that though the construction phase of the colony will require, from parties involved, agreeing upon an initial investment that will be basically without financial return, this dependency on subventions cannot last forever; « donors » (states, entrepreneurs, philanthropic funds) would agree to bear the project only if it should lead to an entrepreneurial venture capable of ensuring its functioning independently. And this all the more that a profitable investment potential should logically reveal itself from the new prospects of development of space activities that this first major achievement and the development of logistics will have put forward.

The issue is therefore to imagine for the Colony activities of production and marketing of goods and services for which there will be a market on Earth. Several reflections have been devoted to the subject in the past, even though only a few have considered the issue of economic consistency; it is not enough to say that we will import Mars deuterium because it is 5 times more abundant in the Martian water than in the water of our oceans … One of the most detailed scenarios, presented by Robert Zubrin, is that of a « triangular trade » established between the Earth and its vicinity, Mars and its vicinity and an industrial area assumed to be located in the asteroid belt, according to the scheme below.

But this scenario implies having reached a high level of development of industrial activities in the area with, in addition to the Martian activities themselves, an exploitation of the mineral resources of asteroids, seemingly for the purpose of building giant solar power plants in Earth orbit, all this served by a cyclical transport system much more impressive than that proposed by SpaceX to just allow the colonization of Mars.

Moreover, like all scenarios involving interplanetary bulky cargo traffic, this one is jeopardized by the cost of space transportation. Within the prevailing conditions of launching and space propulsion supplying, no metal from such sources, even among the most precious ones, could pay for its use on Earth. And transporting from asteroids to the Earth vicinity itself, although theoretically less expensive than launching from Earth, would remain too expensive and require very important investment and operation / maintenance costs for the specific transport infrastructure. By comparison, considering as a first step a limited operation in the Martian environment seems to be more realistic and, as our analysis of the intentions of SpaceX convinced us, actually consistent with the operational capabilities of an MCT.

1.2 No colony without purpose

Venturing oneself into specifying the conditions of implementation and operation of such enterprise incidentally leads into unambiguously assigning to it a “raison-d’être” that, even though it can be questioned, is nevertheless necessary for its justification. Indeed, answering questions about its technical, human and economic feasibility leaves open the ultimate question, rightly often asked:

« Stay on Mars, What for? »

While a hugely developed colony – up to a metropolis of a million inhabitants – may be seen as a « second branch » of Mankind, ipso facto bearing within itself a raison-d’être similar to that of terrestrial societies, this cannot be the case at a much more modest scale for a first settlement. The residents of this first colony should therefore:

• on the one hand, be driven by a clear motivation to undertake this adventure, being understood that just a few would decide on a final exile at this stage;
• on the other hand, actually find in this adventure (including during journeys) enough satisfaction and things to do, so that they would overcome all its stressful aspects (distance, duration, confinement, promiscuity …).

1.3 A realistic scheme: the supply of residence

On the basis of these considerations, we decided that our economic analysis of a colony, in order to be set within a framework as realistic as possible, had to be developed upon a scenario addressing, by priority, the following selection criteria:

• supplying products or services which would be specifically Martian, so as to mitigate competition from other locations (including terrestrial ones);
• discarding exports involving interplanetary transport of bulky masses (metals, semi-finished products), unless their value justifies the cost of travel (paying passengers, possibly some rare metals).

Moreover, the execution process should be compatible with:

• the investment amounts assumed to be mobilized;
• the technical performance characteristics (payload mass, travel time, safety, availability) as well as the economical ones (operational cost, maintenance cost, life cycle duration) of the whole MCT system.

It seemed to us that the orientation best answering the two selection criteria was that of creating an establishment offering residency supply, with all associated services, to the benefit of three types of customers:

• scientists or technicians missioned by their organizations (governments, corporations or associations) to perform work or research requiring or taking advantage of a local presence;
• rich and adventurous tourists, for whom a sojourn on Mars is a lifelong dream;
• wealthy individuals who decide to leave Earth, their families and all their belongings to settle permanently on Mars, in order to develop their skills or enjoy a retirement in the desert…

This scheme can look to be not very democratic. But, regardless of the fact that it must be based on a customer base of people able of paying for the sojourn (we will see that we estimate the price to be in between 6 to 8 $ Million), this is not the case. Missioned researchers will be selected on their intellectual proficiency and physical abilities; there will be no financial segregation coming into the picture. Of course, the cost of their trip will be paid for by their organization. As far as tourists and voluntary exiles are concerned, we assume, in the assumptions of the model, that they stand for 35% of the population of the colony, out of a total of « clients » amounting to 45% of the whole population; other residents will be professionals, each one highly competent in his profession, recruited by the Colony (or by subcontractors, licensees) to take care of the broad spectrum of services required for living within the Martian community.

It could also be that some people decide to make the trip at their own expenses to independently practice their profession on Mars. It is also likely that some people coming as tourists or retirees would like not to miss opportunities to keep working part time, exercising their professional skills and be useful to the community. In any case, they should get a license from the colony to carry on a business (so far as it requires resources of the colony); for mere safety reasons it is indeed essential that the colony keep full control of whatever evolves within its precincts.

All trades, from the most intellectual to the most manual, will be represented. The selection of people will be based on clear criteria that have nothing to do with wealth or social status, namely:

• competence;
• physical and psychological qualities required by the extreme conditions of the adventure;
• motivation for the proposed trip.

Salaries will have to be exceptionally high in order to take into account the constraints and risks of the trip and sojourn, and to motivate volunteers to « jump in ». Luckily, it happens that, because of the important share of the cost of transport within the total sojourn cost, paying high salaries will not be a major obstacle, and this is a positive factor for colonization.

2 Economic conditions

2.1 Financing the initial investment

2.1.1 Amount evaluation attempt

In the frame of this paper, we have not undertaken to either quantify the cost of the means of production and of their setting up / erection on the surface of Mars, or to quantify the cost of building the housing facilities needed by the team of pioneers responsible for the start-up and initial implementation of these facilities. In view of the solutions proposed in our report « Martian Residences: molehills or glass houses?” we can nevertheless roughly estimate the total mass of such equipment and related materials (imported from Earth) to a few hundred metric tons, delivered by a few flights (in automatic mode):

• for an estimated cost of payloads of $ 0.93 million per metric ton (average value computed from the data used in the model), assuming 500 metric tons is needed, we get an amount of $ 0.45 billion.

To this amount must be added:

• the cost of development and qualification of the MCT and its equipment. Assuming an 8 year program priced at $ 5 billion / year, we get $ 40 billion;
• the cost of production of ten MCT required by the project (6 interplanetary, 3 tankers for refueling, 1 spare). We get $ 10 billion.

We thus reach a total of about $ 50 billion to be spent over 20 years, most of which will have to be invested during the 8-10 years prior to the actual installation phase.

2.1.2 Possible funding sources

We assume that the will of developing an MCT for the colonization of Mars, repeatedly asserted by Elon Musk, will lead to tangible results, sufficiently reliable and exciting (especially with regard to safety and transport cost cuts) for these successes to produce a driving effect on the space community, seemingly already convinced that Mars is indeed the goal.

Note that this requires not only that the technical and commercial success of SpaceX, be pursued, but also that the audacious multi-entrepreneur Elon Musk be not trapped within some of his rather (financially) bold initiatives in the fields of solar energy and electric cars. If he achieves his ambitious goals, the pursuit of his Martian dream will be greatly facilitated. However if he were to lose the confidence of customers of and investors in SpaceX or Tesla or of the financial community, the consequences could be fatal.

This driving effect, already seen, could induce the following entities into committing to finance the investment:

• a group of space agencies, which, on the basis of their available multi-year budgets, would co-finance the development of equipment with their industrial suppliers, and the purchase of the operational models together with an operating company (see below). They will be part of the core shareholders of the equity of the operating company;
• The industrial suppliers selected (through public tenders) who, under the cover of their supply contract, and motivated by the interest to be present in this new market, agree to co-finance the developments of their equipment. They could also accept to receive options to purchase shares of the equity in the operating company as part of their payment;
• a “Mars foundation” created with the donations of some major entrepreneurs wishing that their success allow the colonization of Mars (Elon Musk, Jeff Bezos, Bigelow, Larry Page?); it will be part of the core shareholders of the operating company aside the space agencies (proportion between both to be discussed);
• a “Mars operating company”, created to operate, manage, maintain and develop the colony. Its core shareholders (the space agencies and the Mars foundation) will launch a public stock offering as soon as possible to raise more equity (entry point for private or corporate investors wishing to participate in the Martian adventure).

In case of needs and according to their prospect of becoming profitable, the Mars operating company could also launch one or several loans with different priority rights to be repaid, different maturities, different grace periods and therefore different interest rates. Such loans could be launched after the initial spendings are made with equity. They could benefit of the guarantee of the space agencies;

• the public, as shareholder of and lender to the operating company;
• a Space bank (possibly), dedicated to the financing of the project. This could help to organize / structure the financings and open to the operating company a direct access to the market. The shareholders of the Space bank, will be the same as those of the Mars operating company, the space agencies and the Mars foundation, but it could also raise equity on the markets anywhere in the world (for themselves or the Project). It could also structure and launch loans necessary for complementary financing (or participate in pools of financing organized by others);
•  a Space insurance company (possibly), considering the very special nature of the risks involved. This would give a direct access of the developers of the project to various re-insurance capacities in the world. Its core shareholder could be the Mars foundation.

2.1.3 Amounts likely to be raised

• Space agencies: assuming continuity with the level of effort made during the construction period of the ISS, and assuming an even broader international participation (China, India?), 5 to 8 billion dollars may be reasonably expected each year, over 8 years. Along the ten following years, the annual contribution of the agencies could progressively decrease to some 2 billion per year;
• Industrial associates: this item will stay at a limited level. Indeed, even assuming a total of development contracts amounting to $ 25 billion (excluding MCT), and a retention of ownership of 10%, it only reaches $ 2.5 billion over the life of the program. But it is a commitment of involvement (the retention of ownership could be paid with options to buy shares in the operating company). It is also conceivable that some equipment (e.g. Labs) remain the property of the investors (they would keep the right to get an income from them);
• the Mars Foundation: the Bill and Melinda Gates foundation, endowed with $ 37 billion equity, may be seen as a reference. The personal wealth of Elon Musk is currently « only » a dozen billion dollars. However if he succeeds in achieving his ambitions for his companies (especially with Tesla x 10 in 2018) his assets could far exceed $ 50 billion. We may imagine that another mega-entrepreneur (and space geek!), join in, which would allow reaching a level of equity even higher than the Gates fund, let us say up to $ 40 billion. The Mars Foundation would use part of this money as equity (to be injected in the Mars Operating Company) and part as guarantees (to be given to the suppliers of the Mars Operating Company). All will not be spent at the same time (but mostly at the beginning), and the remaining part, productive as a financial asset (invested under the control of very capable entrepreneurs and managers), could yield a very nice return over equity (10%?);
• the Operating Company. Here, the amount of equity to be issued on the market (in addition to the shares bought by the Agencies and the Foundation and the few of the industrial partners) will depend on the performances (progress of sales, progress towards break-even, then progress towards profits) that the financial analysts will assess. On the basis of costs and prices of our model, profitability will not come before some 20 years (but we are in the same situation for corporations like Amazon). At that time, in the frame of a somewhat stabilized structure of exploitation, the operating margin for a synodical period of 26 months could reach 260 million over a turnover of 2530 million (i.e. 10%). The annual revenue (over 12 months) would be a little less than half that amount, i.e. 120 million. If we (reasonably) bet on public’s enthusiasm , the first solid achievements and the very broad (though indeed risky) nature of the development prospects, it seems that without waiting for 20 years after the inception of the project, a market introduction to the public (“initial public offering” or “IPO”) could be tempted after some 12 till 15 years. Especially if we assume that the capital gains from the valuation of the shares on the market could be income tax free. At that time, we may also assume that the Foundation match the equity (1 to 1) raised from the public, which would also be a way to strengthen confidence and thus facilitate the fundraising.

On this basis we could assume an initial capital evolving somewhere between $ 12 to 20 billion (of which 2 to 5 billion from the IPO). Such an amount may seem low; yet the estimated valuation of SpaceX early 2016 is within this bracket, and should be sufficient for this Mars Operating Company to be seen as a reliable and credible partner (and this will be strengthened by the guarantee it could further get from the Foundation).

Provided the project evolves smoothly and therefore with the prospect of long-term earnings that it can make expectable, the value of the share should rise and especially when the colony is ready to welcome a regular flow of paying guests. This improved valuation of existing equity could offset the money already spent and allow a new issue of equity (fresh money) focused on a new phase of the development of the project.

The equity of the Mars Operating Company could be completed for short periods (working capital for discounting expected sales or income) or even over the long term (up to 30 years) through debt issues. Taking into account the level of equity, assuming that the exploitation would be profitable, and depending on the level of real interest rates, the total amount of debt could safely reach 50% the level of equity of the Mars Operating Company (the interest being an increase of available funds for the Operating company and a leverage of the return on equity for its shareholders).

Finally we could imagine that interplanetary transfer means (MCT) are developed (and exploited) independently. SpaceX or another member of the Foundation could do it under a contract like presently SpaceX does to serve the ISS (and this would allow the carrier to have other sources of income than the Mars servicing). The trips would be organized and managed by these independent companies (there could be several, like airlines companies) within the framework of a service contract signed with the Operating company. Travelers would buy their sojourn (including transports) from the transport provider (carrier) which would freely manage its own pricing policy. A fee for using the Martian facilities would be levied by the Mars Operating Company.

2.2 Achieving a profitable operation over the long run

For the reasons already mentioned, to which we could add the need to provide a prospect of financial return, however remote, to the shareholders of the operating company, the pricing policy should allow, upon the completion of the facility (after the 20 years above mentioned), a profitable operation, reaching at least the break-even point.

The essential purpose of the model is precisely to analyze the conditions under which the colony will have to function in order to achieve such a result. Note that, as already said, we assume the result to be free of corporate taxes (and shareholders, free of income tax on capital gains realized or possibly dividends received), which seems possible to ask and get, considering the very special characteristic of the venture. In order to have these exemptions be accepted, we should consider Mars as an international territory enjoying a special tax agreement from each country participating to the Mars Foundation through its Agency.

These conditions are detailed in the model, as data relating to cost elements:

• ratio of the number of staff to be assigned to the various service tasks, as a percentage of the population to serve (PopPercent sheet of the Excel file);
• preliminary estimate of the size of the various population segments, including the « clients » one (paying residents) (PopSizes sheet);
• for 3 distinct categories of salaries: percentage of employees concerned and average amount of salary; personal transport cost (PersCosts sheet);
• segmentation of the population of customers according to their choice of residence time; maximum payload in a mixed configuration (cargo / passenger); cargo transfer cost (per ton) (FlightCosts sheet);
• data of masses, costs and quantities of equipment and materials to be transferred at each launch window, in a “cruise” (steady) state (CargoCosts sheet);
• rates, by customer segment and length of stay chosen (Sheet Budget).

3 Structure of the model

The model takes into account the above data to characterize trade flows in goods and services between the different segments of residents (and the few personnel involved on Earth). These segments are:

• the paying guests (clients): tourists, long-term immigrants (a minority) and staff on duty (Paying Residents);
• the paying services providers, requested by all residents (Commercial Services Providers);
• the producers of materials (including food) and goods (Mars Materials & Goods Producers);
• The service providers directly paid by the Mars Operating Company, whom we could consider as “civil servants” (Paid Residents);
• The staff on Earth involved in the management of the colony (administrative, financial & industrial staff).

The scheme below shows the main subdivisions of those segments.

4. Discussion of data

The data are shown in red in the file; varying them allows analyzing their influence and determining the conditions for a balanced management.

4.1 Basic data of the scenario

Beyond financial data, the following basic parameters constrain the model:

• the number of transfers possible at each window, which depends on the number of MCT that can be put “on line” and the number of firing pads: we choose the hypothesis of 6 transfers per window (12 launches if counting one tanker per flight), served by 2 firing pads allowing a rate of one launch per week; doing more during this first phase of colonization would too much increase the investment burden;
• the length of the construction phase: 20 years; although already long compared to the usual case of large infrastructure investments, this time span is not much longer and should be accepted by the parties involved, taking into account the totally innovative (and possibly financially very bright) prospects; this duration has an effect on the rate of production of the habitats and the flow of cargo transfers.

These two parameters, combined with assumptions about the length of sojourn, will more specifically lead to determine the size of the population of the colony, once built and viable. The model eventually yields a number of one thousand residents, 45% of which will be « clients » (paying residents).

As far as transport infrastructure is concerned, we chose to apply the performance levels targeted by the Mars Colonization Transportation (MCT) SpaceX project, with a payload delivered on the surface of Mars of 100 T per flight, including, when applicable, up to 100 passengers.

4.2 Workforce

The size of guest population is a basic data to be chosen first. This is because this choice affects the overall size of the population and therefore the technical and financial magnitude of the implantation operation. Combined with assumptions about the length of stay, the number of paying guests for each synodical period also determines the flow of passenger transfers to and from Mars, and therefore the number of flights to be made available. We consider that six flights per period (each way) should be a maximum, knowing that each flight would require 2 to 4 launches, depending on the number of refueling launches chosen for the MCT configuration.

Given all of the model data, this leads to limit a paying guest population to 440 people over a total population of one thousand.

NB: The construction period time is, together with the size of the client population, a key parameter, for two reasons: It determines the time after which the shareholders of the Mars Operating Company will get a return on investment, and therefore makes the investment attractive; and because it influences (for a given size) the pace to impulse to the production of infrastructures (especially housing), and therefore to the importance of the means of production to set up.

4.3 Lengths of sojourn

Guests of different categories, such as the staff ensuring the functioning of the colony, will choose their length of stay, which will go from:

• 18 months, minimum imposed by celestial mechanics, assuming a return in an « economy » mode (conjunction type), to:
• undetermined (lifetime) if the person has chosen to emigrate permanently in this new world, knowing that the possible return occurs only each 26 months (synodic period).

Length of stay means presence on Mars, the total duration of the adventure including also the transfer times (3 to 4 months each way).

The assumptions made on the distribution of these time duration choices, affect:

• the transfer flows (number of flights), as already mentioned;
• the share of the costs of transfers within the overall cost of personnel;
• the number of paying guest trips for sale at each launch window in order to get an optimum filling of capacities supplied.

We choose the following values:

These values (in red) express the following options:

• The vast majority of tourists will stay a minimum time, which seems realistic as this is already quite long for a leisure trip;
• on the opposite, paid staff is asked to commit mostly for 2 to 3 synodical periods; this is essential to the economy of the model, given the importance of the travel cost (controlling the number of trips is indeed essential);
• for missioned people, the execution of their research work combined with the cost of transfers, could lead to longer stays compared to simple tourists;
• only 10 people (out of 440 paying residents) will be « permanent » emigrants; we assume that this choice would remain, initially at least, very limited.

4.4 Salaries of staff

Salaries shall be generally set at a high level, in order to acknowledge the risk taking and the acceptance of the stressing conditions of the mission, beyond the competencies and skills. They will be paid in Earth currency (most likely a basket of currencies matching the basket of the operating company funding), either fully each month, or with a share paid monthly into an account on Earth (and managed) made available upon return. NB: people will use money for their daily life in the colony. This will be a necessity to avoid wasting expensive resources and also to ensure a maximum of free individual choices of expenses.

We considered, to be simple, three segments of people, paid on average as follows (including during the flights):

As previously said, the largely predominant share of the cost of transfers within the total cost of staff makes the salary item a relatively minor one. This is what allows the proposed levels.

4.5 Cost of transfers

According to Elon Musk, the MCT should allow to sell the passenger transfer « ticket » at a price of $ 500,000 (1000000 for the return ticket), if we wish to trigger a real settlement move. This goal seems overly ambitious; considering a mixed payload of 100 passengers (50 tons with personal equipment and food) and 50 tons of cargo transported at a $ 2 million / T price, a transfer (one way) would yield only $ 150 million, while it would require 2 launches with a mass at take-off of around 10,000 T (or4 with a take-off mass of 5000 T, depending on the version of MCT); this could be compared to the Falcon 9 flight, currently sold around $ 60 million (admittedly, in a version not yet reusable operationally) for a take-off mass around 500 T…

However, there is no need to radically depart from these price levels, provided we assume the effective revolution of a totally reusable (and reused) launch vehicle.

In this exercise, it is actually the constraint of tariffs adapted to the estimated potential customer base that led to the choice of the operational cost target for a flight. It turns out that this cannot actually be far from that considered by Elon Musk. We thus chose the following costs, homogeneous in terms of mass level (cost per trip):

$ 2 million / cargo ton (average value);

$ 1 million / Passenger (travel mass of 0.5 T).

This corresponds to a cost per transfer of $ 200 million, i.e. 100 million per launch, assuming the heaviest launch vehicle, with only one tanker flight.

It should be emphasized that if the development of the MCT and the production of flying units are supposed to be covered by the initial investment, the selling price of the flight will nevertheless have to allow anticipating the future renewal of the fleet; in fact, when talking about reusability, we must specify not only at what recurring cost (maintenance, consumables) but also for how many cycles. It is true that the operational cycle will likely be long, 52 months, except if selecting much less propellant-wise efficient return trajectories. Accordingly, the renewal cycle will be more similar to that of commercial planes than to that of reusable commercial launchers, with very likely a perspective of model change rather than just a replacement.

4.6 Types, masses and materials costs

We attempted to draw a list of equipment needed to build the colony. We were especially interested in the list of equipment to be shipped each synodical cycle (consumables, spare parts and equipment for new buildings). The list of equipment and materials to land on Mars prior to starting the construction would require a detailed engineering study that we were not in a position to make; we estimated a total flat mass of 500 MT (see §2.1.1).

We drew upon similar attempts, especially that of the “Homestead Project”, which is very thorough but deals with a completely different scenario in terms of growth.

Estimation des masses, prix et quantités de matériels à expédier à chaque fenêtre de lancement (tous les 26 mois).

The total mass to ship at each launch window (every 26 months) is close to 300 MT, which corresponds to 6 mixed flights loaded with 50 MT of equipment and 100 passengers.

The overall cost of this transfer of cargoes reaches $ 912 million (purchases plus transfer). This recurring amount must first be covered as an establishment investment of the Colony. But as it is scheduled over 20 years, the share relative to consumption and maintenance of tranches already operating will be considered as operational costs of paid stays.

The model, in turn, computes the operating margin in a cruise state, that is to say, once reached the capacity of 1000 residents, after 20 years. Of course, we may foresee that at this rather distant date from the launch of the project, development prospects will have come through, making the “cruise state” notion rather theoretical.

We get an average price of these materials (consumables and equipment together) of $ 0.93 million / MT. This level, high relatively to current market price, is supposed to reflect (enough?) the quality requirements needed for a Martian use, on the basis of conventional criteria of durability, reliability, availability, safety, but also in terms of reparability, which is unusual when commercial space manufacturing is considered.

4.7 Price list

We reach the end of the model calculations sequence with the data for a fee grid. This distinguishes three segments of customers: tourists, long run residents, missioned, and indicates the price (all basic needs included) for the number of desired synodical periods: 1 (1.5 years on Mars), 2 (3.5 years), 3 (6), 4 (8 years) or… life stay.

The model then provides the operating margin (over a synodical period). Ideally, as we have seen (cf. § 2.1.3), this margin is expected to reach, at completion time, a positive figure (break-even), in order to show that the prospects of the Mars Operating Company are positive over the long run (and justifies the payment of dividends and increase in the share value). The model indicates that it is possible with, for example, the following fee grid (in red) in the final sheet:

5 A viable project?

The discussion of above data leads us to consider with caution the characteristics obtained to achieve a break-even point, as many data remain unclear since we lack a detailed engineering study. Nevertheless the model allows identifying the influence of the cost factors, and defining a coherent set of conditions for the realization of the project.

But, foremost, tariff levels to be considered to achieve this balance are instructive. Indeed, these tariffs will give an indication of the degree of realism (or utopia) of the « business » considered when comparing them to the evaluation of what the potential market could accept.

5.1 High net worth clients in search of an exceptional adventure

They are individuals able to devote millions to the fulfillment of the dream of their life, leaving Earth for a sojourn on another planet, an exceptional adventure that will make them “new men”. Most will likely choose to get the thrill of adventure within luxury conditions, which can be offered to them considering on the one hand the high cost of transfers, beside which the hospitality expenses will remain acceptable, and on the other hand the many opportunities for touristic and educational excursions offered by the spectacular Martian landscapes and the geological history of the planet.

But we may also expect to get a small number of people who will choose to stay permanently in this new world to live a second life, either with the desire to take advantage of business opportunities, or just with a will of retreating in the desert …

Two observations lead us to believe that this kind of customers would exist.

The first is based on the observation of the histogram of income tax households (US only): in effect, in 2011, 2% of tax households declared an annual income above $ 250,000, suggesting a capacity of funding for an extraordinary expense such as this one, of several millions. Indeed, such a level of income suggests that the majority of these happy taxpayers are also the owners of a sizable equity, either source of their income, or resulting from savings built throughout their lives. It is difficult to tell how many healthy adults are within these 2% of American families, but knowing that the adult population is of 250 million, a figure of some 3 million does not seem absurd.

Histogram of income tax of US tax households.

The second observation concerns the extraordinary high number of volunteers reported for the trip without return proposed by Mars One, a project yet totally devoid of credibility. This figure is 70,000, which suggests that candidates would not lack. If we estimate the population likely to candidate (in the most developed countries) to reach 700 million, we get a ratio of 1 fanatic (no return!) to 10000. A more serious offer, based on existing infrastructure, providing a return ticket and based on strong technical and financial bases, such as that we imagined here, would receive undoubtedly “the vote” of a much larger number of volunteers. Given these elements of reflection and remaining aware of their questionable nature, we think it would be reasonable to increase the ratio of potential customers of this category from 1/10000 to 1/2000. Considering, on a global scale, a number of wealthy adults four times that in the United States, we eventually get the following potential customer base:

3000000 x 4/2000 = 6000.

If this number cannot be taken as such, in absolute terms, we anyway don’t get 100. The consideration of this niche of wealthy individual clients in quest of exceptions is therefore legitimate in this exercise. This customer base could form the backbone of a Martian economic model, at least initially.

5.2 Professionals on a mission

Alongside this client segment of privileged tourists looking for adventure (who may also keep some activities on Earth) a second category of paying visitors will gather individuals sent on the planet in order to complete missions that will benefit from the maintenance and development of the Colony, on behalf of official institutions (governments, international organizations, space agencies, research organizations) or on behalf of profit-oriented organizations (research laboratories and industrial development, media). In this case transfers, basic means of subsistence and salaries would be covered by the employers; but visitors will have to pay for their daily life and leisure.

Paying $ 8 million, all included (ie salary included), for such a sojourn will be very attractive to many organizations, public or private. Remember that NASA must pay 60 million for one seat in the Russian Soyuz capsule servicing the trips to the International Space Station!

In the model, we choose to take into account a modest staff of 85 people. With time and experience, this population will grow, while the most powerful organizations will set up their own laboratories and research stations on the planet. A market of several hundred people is likely.

Remember that this population of “paying guests” stands for (according to our assumptions) only 45% of the total population. More than half the residents of the colony will be professionals providing specialized services. Their travel and living expenses, as well as salaries will be paid either by the operating company of the colony, or by their company (having contracted with the Mars Operating Company).

6 Summary of main features

7 Conclusion

To analyze the viability of a Martian colony in economic terms we chose a scenario respecting two fundamental criteria for any marketable activity: it must be based on goods or services specific to Mars and minimize the interplanetary traffic of heavy / bulky masses. The choice was therefore focused on the supply of residency, with three segments of customers: wealthy tourist adventurers, scientists or engineers missioned by their parent organization and (in small numbers) individuals choosing Mars as their retirement residence.

The size of the Colony is basically determined by the investment capacity and the volume of traffic that it is possible to provide between planets. A thousand residents may seem a modest figure, and it is true that the scenario does not match the idea of founding an embryo of a Martian city geared to reach a population of one hundred thousand to one million inhabitants. But it seemed better to choose a more realistic perspective, promising to become a self-supporting entity within an acceptable time for developers. Without this caution, the exercise would have lacked guidelines and limits.

We conclude to the economic feasibility of the enterprise, with all reservations due to limitations of the scope of the study, and provided two major assumptions:

• capacity to gather a pool of investors capable of bringing (and willing to bring!) some $ 50 billion;
• success of the development of the transport system (the MCT offering a transfer price of about 2 million / MT).

What is interesting in this scheme is that although basically relying on a wealthy individuals clientele, it structure finally involves populations whose income are not exceptional, the only requirements to participate being motivation (individual and, if necessary, family), physical and mental health and skills.

We reach at this stage to a first-generation colony that has become capable of getting rid of Earth subventions, even if we assume that states will keep making whatever effort necessary to facilitate the emergence and consolidation of the new community (acknowledgment of property rights on the land, or on intellectual production, of business practices, granting of preferential loans, transport prices at marginal costs; facilities for movements of people, etc.). It is difficult to estimate what should be the size of a more evolved colony. This parameter is essentially a function of the variety of activities necessary for its persistence. A part of these activities is linked to its development, its operation and its maintenance; another part, the more difficult to assess, is dedicated to the production of goods and services allowing the Martian economy to achieve a balance in its trade with the Earth.

Richard Heidmann

8 Références

Books and communications

Embarquement pour Mars, 25 défis à relever – Collectif d’auteurs Association Planète Mars, 2015 (2^e édition), A2CMédias (Eyrolles)

Cap sur Mars (trad. française de « The Case for Mars ») – Robert Zubrin & R. Wagner, Editions Goursau ISBN 2-904105-09-3

From Imagination to Reality, Part II : Base Building, Colonization and Terraformation – American Astronautical Society (AAS) Vol.92, 1997 ISBN 0-87703-428-X

The Case for Mars V – AAS Vol.97, 2000 ISBN 0-87703-460-5

Planète Mars, une attraction irrésistible – Heidmann, ALVIK Editions, 2005 ISBN 02-914833-36-9

<h2Articles

Analyse d’un concept « Mars Colonization Transport » (MCT) a deux lancements – Heidmann, Sept.2015, planete-mars.com

Une colonie martienne : essai d’analyse technique – Heidmann, Nov.2008, planete-mars.com

Résidences martiennes : Taupinières ou Maisons de verre ? -<Heidmann, Avr. 2016, planete-mars.com

The Emerging Inner Solar System Economy – 4Frontiers Corporation, 2008

The Economic Viability of Mars Colonization – Robert Zubrin (then Lockheed Martin)

Mars Foundation presentation – Bruce McKenzie, 2006

Requirements for Space Settlement Design – E.Gale, R. P.Edwards, The Boeing Company 4Frontiers Corporation

A Permanent Settlement on Mars: Generation 1 Design – Georgi Petrov, B. Mackenzie, M. Homnick,. Palaia, IV 4Frontiers Corporation

Reference Reactor Module for the Affordable Fission Surface Power System – I.Poston, R. J.Kapernick STAIF 2008

A View of Future Human Colonies on Mars – Robert J. Gustafson, 2003, Orbital Technologies Corp.

A sustainable approach to a manned mars mission – Gregory P. Scott, IAC-08-E5.3.5

A Mars Colony: C096 – John Blackwell, Phil Gyford, Glenn Hough, A. Montgomery and D. Wyche, 2015

Internet Sites

Documents de la Mars Foundation – www.marsfoundation.org/docs/

Documents de 4Frontiers – www.4frontierscorp.com/library/document_publications.php

The Mars Society – www.marssociety.org

Association Planète Mars (section française de la Mars Society) – planete-mars.com