A new coal-powered bitcoin mining operation is now on the cards in Australia as the Sydney-based IoT Group have signed a provisional deal with Royalti Blockchain to install Bitfury’s bitcoin mining hardware.
The IoT group, listed on the ASX (Australian Securities Exchange) announced today that its subsidiary - IoT blockchain - has signed a “conditional binding Terms Sheet” with the Royalti Blockchain Group - licensed partner of the mining hardware company Bitfury in Australia.
If the deal goes ahead, they plan to create a new “Blockchain Application Complex” that will use the decomissioned Redbank power station in Hunter Valley, 120 miles North of Sydney, to deliver cheap power to the proposed mining center.
The coal plant, originally built in 2001, stopped operating in 2014 but if the plans go ahead will be turned back on to deliver 20 MW at a cost of 11cents per KWh. With normal retail rates usually ranging from 30c to 45c per KWh the new operation will offer a substantial advantage to the new plant as power costs are a signficant cost of mining operations.
Claimed by IoT to be worth more than $190 million AUD, the deal nonetheless still has some crucial criteria to meet before it is confirmed. Iot Blockchain in the ASX announcement emphasised that:
“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.”
Australian Silicon Valley
This latest advancement forms part of big plans for the area by IoT. Talking to Fairfax Media, IoT Group executive director Sean Neylon explained:
“This deal has opened the door to these kinds of businesses. The reasons why blockchain specialists are not in Australia is because power costs are too high, it’s not efficient. We’re offering services so clients can build data centres where they can get cheaper power.”
While the environmental impact of cryptocurrency mining remains one of the most controversial aspects of the industry, Hunter Energy maintain that they are “exploring battery and solar on the site.”