Rockdale, Texas, a former coal and aluminum producing town hit hard by the exit of those industries.
DMG (TSX-V: DMGI), a Canadian firm, will provide hosting and management services for the Texas facility and will work with Bitmain to expand the capacity and to ensure efficient operations of the mining hardware.
DMG’s CEO, Dan Reitzik said the selection of his company was a great testament to his team.
A communication lapse and apparent delay in the launch of the facility that coincided with a crash in cryptocurrency prices and extensive layoffs at Bitmain had caused concern among Rockdale town officials.
But the project is back on says Clinton Brown, Rockdale Lead Project Manager for Bitmain, quoted in the company press release issued October 21st:
“We are excited to launch this facility, which is significant to Bitmain’s global expansion plans. The stable and efficient energy resources in Texas are fundamental to the inevitable scale of growth for the cryptocurrency mining industry.”
According to a report in Wired published last July, Bitmain officials came to Rockland in 2017 and promised to convert a former Alcoa smelter into a cryptomining factory housing 375 000 of the company’s signature Antminer machines.
Bitmain also promised to finance and create vocational training programs to support the facility and region in exchange for a deal that would see them pay about half of what other local industries pay for power.
Cryptomining is notoriously energy-consumptive, and these “mines” (essentially data centres) tend to be located in regions with very cheap or highly-subsidized electricity.
Bitmain was also granted a 10-year tax abatement as part of the deal. This would nonetheless have added $700 000 USD to town coffers in Rockdale, which currently collects about $12 million USD in municipal taxes.
Bitmain expanded at breakneck speed in 2017 when the company saw a ten-fold increase in its profits thanks to the Bitcoin Bull Run of that year.
But the Crypto Crash of 2018 took it’s toll, even on Bitmain, a company believed to enjoy a virtual monopoly in cryptomining and cryptominer manufacturing.
First came a hiring freeze in Rockdale in November 2018 and the delay of a promised job fair.
Communications with the town’s former Bitmain contact then reportedly lapsed when it was revealed that the contact was among an estimated 80% of the Bitmain workforce laid off due to costs-cutting.
When promises to create 350 jobs went unfulfilled, officials stayed promised tax abatements, and Rockdale officials began to wonder whether the facility would open at all.
Bitmain now refers to the US as, “one of the company’s most strategic overseas locations” and has announced that construction of the facility will continue to be followed by an expansion:
“Construction of the initial 25MW of the mining farm, on a 33,000 acre site owned by Aluminum Company of America, Alcoa, began in 2018 as part of the company’s ongoing plans to build the world’s largest cryptocurrency mine.”
“Bitmain will continue to construct the 50MW facility, which can expand to a capacity of more than 300MW, making it the largest bitcoin mining facility in the world.”
Bitmain also promises to follow-through on promised education programs, and, “will look to local suppliers in the town as preferred vendors to support the ongoing construction of the data centre.”