US miner raises $105M to recycle waste coal into crypto

Stronghold Digital Mining has raised more than $100 million in two private placements supporting its model for sustainable Bitcoin mining.

The Pennsylvania-based Stronghold Digital Mining has announced the completion of two private equity securities raises worth $105 million.

According to an announcement shared with Cointelegraph, the firm’s first power generation facility, the Scrubgrass Generation Plant in Venango County, converts waste coal into energy on a scale equivalent to “a large-scale hydropower plant” that is then used to mine Bitcoin and other cryptocurrencies.

The waste coal recycled by Stronghold was produced by coal mining operations in the 19th and 20th century. Stronghold’s power generation processes allow it to rehabilitate large areas of land that were devastated as a result by waste coal acid drainage (AMD).

AMD describes a process in which rain or snow mixes with the sulfur in coal waste, allowing it to run into water systems and threaten aquatic life. After removing the waste coal, Stronghold also plans to donate the restored land back to local communities.

The company estimates that for every Bitcoin it mines, 200 tonnes of waste coal is destroyed.

“Coal waste fires have been wreaking havoc in my home state of Pennsylvania for the last hundred years,” said Stronghold co-chairman, Bill Spence, adding:

“We employ 21st-century crypto mining techniques to remediate the impacts of 19th and 20th-century coal mining in some of the most environmentally neglected regions of the United States.” 

Working in partnership with local environmental authorities, Stronghold has already reclaimed 1,000 acres of Pennsylvania land it describes as being “once-unusable.” In addition to removing more than 98% of mercury, NOx, and SO2 emissions, the firm’s production process creates fly ash — which is can be used as a fertilizer.

Stronghold hopes to have more than 28,000 cryptocurrency miners operational by 2022, and is in discussions to acquire facilities representing more than 200 megawatts of electricity generation capacity.

The raise comes as the Bitcoin community is becoming increasingly environmentally conscious, with Tesla CEO Elon Musk famously reversing course on the electric vehicle manufacturer’s decision to accept payments in Bitcoin, citing the environmental toll of coal-powered mining.

Earlier this month, Musk indicated Tesla would explore resuming support for BTC should the mining sector shift to being at least 50% powered by clean energy.

Related: China’s crackdown means Bitcoin is working, says crypto miner

The controversy over the ecological footprint of Bitcoin’s creation has contributed to a heavy bear trend for publicly-listed North American mining stocks in recent months, which have experienced draw-downs of between roughly 50% and 60% since posting all-time highs.

Despite the broader crypto bearish trend showing few signs of slowing down, independent investment bank, Compass Point, has given Riot Blockchain (RIOT) and Marathon Digital (MARA) a buy rating — noting the firms are generating BTC at discounts of 62% and 70% compared to spot prices respectively.