What key components for life support and propulsion can be derived from lunar water ice?
Hydrogen and oxygen
The fundamental value of extracting water ice from the South Pole region lies in its chemical composition, which can be separated into its constituent elements: hydrogen and oxygen. These elements are the necessary components for sustaining a permanent extraterrestrial base. Oxygen is required to create breathable air mixtures for astronauts inside pressurized habitats. More significantly, hydrogen and oxygen, when combined appropriately, form high-energy rocket propellants. The ability to produce propellant locally via in-situ resource utilization (ISRU) dramatically lowers the mass that needs to be launched from Earth, offering an immense economic and logistical advantage for future deep space missions originating from the Moon.

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What's So Special About The Moon's South Pole - YouTube