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ALRP Generates $30 Million BTC: Mining Companies Turn Coal Into Bitcoin

Last Updated April 30, 2024 10:24 AM
Teuta Franjkovic
Last Updated April 30, 2024 10:24 AM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • ARLP mined $30 million worth of Bitcoin using excess power at its facilities, starting in 2020.
  • The miner isn’t buying Bitcoin, but utilizing existing equipment and low energy costs for mining.
  • ARLP’s smaller BTC stake is strategic, using resources for mining.
  • US Bitcoin boom breathes new life into idle fossil fuel plants from other mining companies.

NASDAQ-listed coal mining company Alliance Resource Partners (ARLP) announced that it has generated $30 million from Bitcoin (BTC) mining by utilizing surplus power at its operations.

In the second half of 2020, Alliance Resource Partners began a pilot project to mine Bitcoin, joining a range of other mining firms.

ARLP Mines $30 Million in Bitcoin Using Excess Power

According to Cary Marshall, the company’s chief financial officer, in the latter half of 2020, Alliance Resource Partners initiated a pilot project  to mine Bitcoin using surplus electrical capacity at its River View mine.

During an earnings call  Marshall said that, by the end of March, the firm had amassed 425 BTC , worth about $30 million. He explained that in the second half of 2020, ALRP initiated a pilot project, capitalizing on already paid-for but underutilized electrical capacity.

After accounting for the net costs of property, plant, and equipment, the initiative resulted in a gain of $7.3 million. He emphasized  that the company is not purchasing Bitcoin but, instead, is solely mining with existing equipment. Marshall also said the company was taking advantage of low energy costs by renting out extra capacity to other Bitcoin miners.

He said :

“We do have some extra capacity that we’re renting out to other Bitcoin miners within the data center that we’ve effectively built for this bitcoin mining to take advantage of the low energy costs we have.”

ARLP’s Bitcoin Mine Signals Broader Corporate Crypto Strategy

ARLP’s entry into Bitcoin holdings represents a modest but strategic development compared to larger corporate investments in the cryptocurrency. According to BitcoinTreasuries.net, MicroStrategy holds the largest Bitcoin portfolio. Michael Saylor’s companies holdings are worth $13.5 billion, with Tesla also has a significant amount of BTC, worth $615 million.

This highlights the varying scales and strategies of Bitcoin investment among publicly traded companies. ARLP’s approach uses its operational resources for mining, marking a distinct method of engagement with cryptocurrency.

Beyond ARLP, Fossil Fuel Plants Find New Life in Bitcoin Mining Boom

However, Alliance Resource Partners is not alone in its approach to Bitcoin mining. In 2018, Stronghold Digital Mining began using waste  from decades-old coal power plants to generate electricity for their Bitcoin mining operations. Specifically, they use coal ash—a byproduct of burning coal which can contaminate groundwater and includes carcinogenic heavy metals.

Stronghold collects this ash from nearby mines and processes it at their facilities. After sorting and crushing, the coal ash is burned in a boiler. This produces electricity that powers the company’s supercomputers dedicated to mining Bitcoin.

In 2014, Atlas Holdings acquired a coal plant  in New York’s Finger Lakes region, which had been inactive since 2011, and turned it into a gas-powered facility. The Greenidge Generation plant initially used 14 megawatts for Bitcoin mining. There are, however, plans to expand its capacity to at least 500 megawatts by 2025.

Meanwhile, Canada-based Digihost has revitalized a partially operational gas plant  near Buffalo, New York, running it at full capacity and planning to acquire a second plant in nearby Niagara County. Meanwhile, in West Virginia, the Grant Town coal-burning plant is exploring cryptocurrency mining as a strategy to avoid bankruptcy.

Following China’s stringent regulations on cryptocurrency mining in 2021, the United States has emerged as a global center for the industry, partly due to its abundance of idle fossil-fuel plants. Entrepreneurs are seizing the opportunity to purchase and rejuvenate these facilities, potentially earning millions. However, environmentalists are deeply concerned about the environmental impact, criticizing the decision to extend the life of these polluting plants.

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