The exploration of space originally gained impetus due to scientific interest and later owing to political and military strategies of the super powers. Today, not only United States of America and Russia, but many developing economies are interested in outer space. The economic considerations of undertaking mining in space is obvious given the abundance of resources available on the Moon, on Mars and the asteroids. Extra-terrestrial mining could cut down the costs of space travel and also provide material resources necessary for life on Earth. Private companies across the globe are investing in the exploration of space, leading to countries such as America and Luxembourg passing national legislation legalising the activities of these corporations and allowing them to appropriate to themselves the resources mined through their operations, without granting ownership of celestial bodies thereby complying with the Outer Space Treaty. This paper seeks to analyse the policy and legal implications of undertaking mining in space by commercial entities. The paper contemplates the possibility of conflict between the general principles of international space law contained in the five treaties with national legislations passed by USA and Luxembourg and more recently, the United Arab Emirates. A more unified approach by the international community on the subject of space mining is suggested which would harmonise the interests of the states as well as commercial players. The aim of this paper is to identify the legal and policy challenges in space mining and suggest a harmonised international framework which would benefit both corporations and states.