Bitfarms announced the installation of a crypto mining center in Argentina. The company signed a non-binding memorandum of understanding to ensure electricity supply at approximately USD 0.02 per kWh that will allow it to continue with the development of the 60 MW Bitcoin mining facility in the country.
The crypto mining company has carried out considerable contractual and due diligence work over the past six months to determine the viability of the expansion project. Birfarms has since signed a significantly improved power purchase agreement with a private power producer in Argentina under which the company has the right to extract up to 210 MW of electricity at its discretion. The initial duration of the contract is eight years. For the first four years, the effective cost of electricity will be $ 0.022 per kWh.
With favorable weather year-round, the facility in Argentina does not require expensive liquid immersion cooling to keep mining equipment cool and operating optimally – they will be cooled with fans, similar to how they are cooled at the facility. That the firm owns in Québec.
The company reported that it is also in advanced contractual discussions with a construction company with experience in public service electrical infrastructure and civil construction to design and build the electrical interconnection, high voltage power lines and transformers necessary with the aim of mining Bitcoin. In early 2022 at the new facility.
The proposed new mining facility is very close to the utility company and as such the electricity contract does not involve any interconnection with the local electricity grid, which has the advantage that electricity cannot be reduced in times of failure. Unusually high usage. This means that mining equipment can operate with maximum efficiency and performance, regardless of the conditions applicable to the local power grid.
In this way, Bitfarms plans to relocate a substantial number of its older miners to the new data center. While older miners are less efficient than newer ones, the low cost of electrical power and the proven reliability of these miners will extend their economic life. This strategy will allow its older mining teams to continue to increase cash flow from operations and contribute to Bitfarms’ overall corporate hashrate.
As a basis for comparison, the company reported that the equilibrium cost to mine a Bitcoin during the fourth quarter of 2020 was approximately $ 7,500 in Quebec. If the new Argentine facility had been operating for the same period, the breakeven cost to mine the same Bitcoin would have been $ 4,125, a 45% savings compared to Québec.
With up to 210 MW of low-cost power available, the Argentina facility is expected to be a significant contributor to Bitfarms reaching its target of 8.0 EH / s by the end of 2022. And it forms another stepping stone in the intent to provide geographic diversification. Of production to reduce risk and serve as an effective hedge against the next halving of 2024.