London Stock Exchange (LSE) listed Argo Blockchain (ARB) has signed a non-binding Letter of Intent (LOI) with a New York company for the acquisition of land and access electrical power in Texas. The LOI details terms for Argo Blockchain acquiring 320 acres of land with access to 800 MW of electrical power.
In a press release disclosing the LOI, Argo Blockchain outlined that they aim to build a 200 MW facility on the land within the next 12 months. The deal would be executed as a share purchase, with the New York company – DPN LLC – receiving $17.5 million worth of new ordinary shares in Argo Blockchain.
The press release notes that the facility will allow Argo to secure some of the most competitive power prices worldwide, with the majority of power being sourced from renewables. The LOI also gives Argo access to a $100 million credit line, which the company intends to use to build the center and acquire mining machines.
Texas is widely acknowledged as a favourable spot for Bitcoin mining. With the state producing over one fifth of the United States energy production, miners can secure extremely competitive power prices. Renewable energy sources contribute roughly one fifth of the state’s energy production with over 28.8 GW of installed wind power production capacity in the state. Incidents of significant demand-supply imbalances on the Texas grid – ERCOT – gives miners the possibility to negotiate some of the most competitive power prices in the industry. The demand-supply imbalances that occur in the region were recently highlighted as power prices reached $9 per kWh for the everyday consumer as half of the wind power stopped generating due to icy weather.
Argo Blockchain CEO Peter Wall commented that the region “gives Argo tremendous control over its mining operations, as well as significant capacity for expansion”. He further noted that Argo “have been able to secure access to some of the cheapest renewable energy worldwide in a location where innovation in new technologies is encouraged and incentivized.”