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Australian Blockchain Firm Strikes $190 Million Crypto Mining Deal

Last Updated March 4, 2021 5:07 PM
Samburaj Das
Last Updated March 4, 2021 5:07 PM

Sydney-based IoT Group, an ASX-listed firm, has inked a deal with the Australian reseller of Bitfury’s bitcoin mining hardware to kickstart a mining operation if it can get a decommissioned coal plant up and running again.

In an announcement  and disclosure on the Australian Securities Exchange (ASX) on Monday, the IoT Group revealed its subsidiary IoT blockchain had signed a ‘conditional binding terms sheet’ with Royalti Blockchain Group, the Australian reseller of bitcoin mining hardware giant Bitfury.

The proposed deal sees the IoT Group envisioning the development of a ‘Blockchain Applications Complex’ (BAC) in Hunter Valley, powered by the Redbank power station – a decommissioned coal plant. As reported previously, the IoT group partnered Hunter Energy in the endeavor with the latter working to acquire the power station to build the proposed mining center across two hectares. If successful, the IoT Group claims it will be able to draw energy at wholesale prices from the power station.

The deal is said to be over AUD$190 million according to a media release by the IoT Group, although disclosure compliance rules see no details of the figure present in the official ASX announcement.

According to the terms of the agreement, Royalti would install its Bitfury mining hardware at the facility provided by the IoT Group, alongside 20 megawatts of power for at least five years at 11 cents per KWh. Retail rates, in comparison, cost anywhere between 30c to 45c/KWh.

Cheap coal power could soon power cryptocurrency mining in Hunter Valley, Australia.

However, it is imperative that Hunter Energy acquires and recommissions the now-defunct Redbank Power Station to power its cryptocurrency mining operation. The coal plant was shut down in 2014.

In its ASX announcement, IoT Blockchain said:

Investors should note that the Terms sheet is subject to and conditional upon the satisfaction or waiver of certain conditions precedent, including the completion by Hunter Energy of its proposed acquisition of all right, title and interest in the Redbank Power Station to the absolute satisfaction of IoT…If Hunter does not complete its acquisition…or if competition does not occur under the terms sheet…the transaction…will not proceed.

The terms for a legally binding Power Purchase Agreement will occur no later than October 1, 2018, the announcement added.

Featured image from Shutterstock.