What does Elon Musk mean when he says, "reasoning from First Principles?" It's one of his key business philosophies in determining what industries to disrupt. Let's unpack that and see what it means, historically and in this context.
What if you go past the “raw material cost” line and move it as well? Platinum and other precious metals are exceedingly rare on Earth, but can be found in abundance in some asteroids. By mining asteroids, we can actually expand the raw material supply and therefore lower the cost via the law of supply and demand. If platinum were half or a tenth the price, we will eventually find new practical uses for it. Planetary Resources goes to the heart of the matter concerning rare materials. Such systems may eventually become cost effective due to cheaper launch vehicles from Space-X and their competitors.
Or as they used to say in the L5 Society (before it became part of the National Space Society) – “Ninety percent of the materials available to humanity are not on Earth.”