IOT Group is seeking to establish a hub for crypto-currency miners that will plug directly into a Hunter Valley power station if it is recommissioned.
The Australia Securities Exchange (ASX)-listed firm has signed a partnership agreement with Hunter Energy – which is working to acquire the decommissioned coal-fired Redbank Power Station – to build a two-hectare Blockchain Applications Complex (BAC) on the site, which will get energy from the power station ‘before the grid’.
The proposal will make the Hunter Valley, best known for its vineyards, “the hottest place in the world for the global crypto billionaires” a spokesperson for IOT Group said.
The set-up will “assist clients to operate and manage their Blockchain businesses on a more cost-effective basis as the cost of power is likely to be more economical” IOT Group said in a statement today.
A company spokesperson said the site would boast new housing, coffee shops and restaurants and attract crypto-currency miners from all over the world.
“There are no crypto miners in Australia currently because power is too expensive. To make crypto mining work you need cheap power and IOT will change that. IOT has created the biggest and only opportunity for global crypto miners to come to Australia,” a spokesperson for the company said.
The location would also mean savings on “the additional charges and costs associated with power transmission, including grid costs, poles and wires, and electricity retailers margins” the company added.
Crypto-currency mining is incredible energy intensive, meaning any saving on electricity miners can secure is significant.
Ongoing estimates of the annual electricity consumption of mining Bitcoin alone, puts it somewhere close to the equivalent electricity use of Colombia. Others have calculated Bitcoin mining to be about 0.1% of total global electricity demand.
IOT Group says BAC customers could offer power prices at less than 20 per cent of normalper kilowatt hour charges.
Over the last few months, the company has appointed a number of established crypto-currency miners to its Blockchain Advisory Board including “early adopter, miner and evangelist for BTC, Dash and Ethereum” Chadd Burgess, and Wooyoung Joo an “experienced miner and investor in the cryptocurrency space” who has built and managed mining operations in China and Europe, the company said.
The small cap company, which has struggled with a shortage of cash since it went public in 2016, also said it was in negotiations with a “major data complex builder/developer and service provider” to co-locate a data centre at the power station site.
“IOT’s intention is that build-out costs and developments costs of the proposed BAC and data centre would be borne substantially by a third-party developer, so as to minimise costs to IOT to develop the BAC,” the company said.
The transaction of Redbank Power Station to Hunter Energy is not yet complete and the site is currently in ‘care and maintenance mode’. Hunter Energy – which will get a 10 per cent cut of the BAC’s net profits as part of the deal – said that it had however reached an agreement to acquire the station and assets.
IOT Group – which is also behind delivery platform Runa and miniature camera drone brand Air Selfie – said if the proposed plan was to come to fruition, the BAC would be hugely attractive to domestic and international blockchain operators.
“By locating IOT Blockchain operations at the Hunter Energy power station in the Hunter Valley with proposed access to electricity at wholesale cost, this will be a first in Australia and has good prospects of attracting interest from Australian and international Blockchain operations, looking to locate where they have surety of sovereignty and the benefits of low cost power,” said IOT Group executive director and co-founder Sean Neylon.