Bitcoin Mining Firm Hut 8 Secures Canadian Electricity Supply Deal

Bitcoin mining firm Hut 8 has signed a $100 million deal with the city of Medicine Hat in the Canadian province of Alberta to both lease land and purchase 42 megawatts (MW) of electrical power for its second mining facility.

The Bitfury-backed company said the new mining facility will be set up next to the southern Alberta city’s new $55.7 million natural gas-fired power plant, the 43 MW Unit 16, which only came online in November 2017. It will join Hut 8’s existing smaller building in Drumheller, which uses 18.7 megawatts to power its array of machines.

Under the terms of an electricity supply agreement, the city of Medicine Hat will provide electric energy capacity of approximately 42 megawatts to the new Hut 8 facilities, which will allow Hut 8 to meet 60.7 MW of a fully funded 62.7MW of power capacity by September 2018. The electricity supply agreement and the land lease both have a concurrent term of 10 years. The delivery of electric energy under the electricity supply agreement will commence upon the receipt of certain regulatory approvals and the commissioning of Hut 8’s BlockBox Data Centres, which are slated for delivery in Q2 2018.

The company said the mining facility will result in the creation of more than 42 local full-time jobs, including electricians, general laborers, systems technicians and security staff. Construction activity will peak at about 100 jobs. Hut 8 resources will also be used to improve infrastructure to the area surrounding the data centre site and in the funding of technology programs and grants in local educational institutions to ensure that the local job force has the skills needed to participate in this new industry.

Bill Tai, Chair of the Board of Directors of Hut 8, said that the signing of the electricity supply agreement and the land lease represents a key component in achieving their business plan for the roll-out of their BlockBox Data Centers in low-cost energy jurisdictions.

“CMH offers stable cost-competitive utility rates and has been very welcoming and supportive of Hut 8’s fast paced growth plans,” said Tai. “We’re excited to work with the City of Medicine Hat to introduce a new industry, with new revenue channels for the City and its residents.”

The $100 million deal came after Hut 8 announced that its common shares have begun trading on the TSX Venture Exchange (TSXV) under the symbol “HUT.”

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