Alliance Resource Partners (ARLP), a U.S. coal miner, recently confirmed it has been using excess power at its facilities to mine bitcoin (BTC). Cary Marshall, the senior vice president and CFO, said the miner initially began this “as a pilot project to monetize already paid for yet underutilized electricity load.”
According to a transcript of ARLP’s first-quarter earnings call, the company mined and held BTC worth $30 million at the end of the quarter. Conversely, the plant and property associated with crypto mining had a book balance of $7.3 million at the end of the quarter.
During a question-and-answer session of the call, Marshall outlined why ARLP chose to venture into BTC in the first place.
“It was just an opportunity that we saw due to the fact that we’ve got excess power at our mining operations. And back in 2020, we were just looking for a way to potentially be able to monetize that particular asset that we had,” the CFO said.
Marshall also revealed that ARLP ended the quarter with approximately 425 BTC, extracted using mining machines acquired when the coal miner pivoted to bitcoin mining. However, the CFO was quick to point out that ARLP has not been purchasing BTC.
Joe Craft, the CEO of the coal mining company, stated that ARLP only sells the crypto asset when it needs to cover its expenses. He also disclosed that the mining firm has extra mining capacity, which is being rented out to other Bitcoin miners within the data center.
Meanwhile, when asked about the cost of mining one bitcoin, Marshall claimed that ARLP mined 61 BTC in the first quarter at an average cost of $24,000. Addressing the halving event, which reduced the block rewards to 3.125 BTC per block, the CFO said:
So we’ll have to see how the halving event turns out as to you know the amount of Bitcoin that we mine here quarterly on a going-forward basis. There are a number of factors that go into that, but that kind of gives you a sense as to where we were at least in the first quarter in terms of what our costs were and how our mining was at that particular point in time.
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