Two mining companies — Miami-based NGDC and Sweden’s Chasqui Tech — have abandoned their facilities in the country’s northernmost county of Norrbotten. According to a local radio station, NGDC disappeared from the area, leaving $1.5 million worth of electricity bills unpaid. Chasqui started setting up operations in Kalix (a locality in Norrbotten) but never completed the facility and the municipality was seeking $50,000 in unpaid rental fees from the company.
Helena Ohlund of the Älvsbyn municipal council, where the NGDC mining farm was based, said local authorities had been unsuccessful in their attempts to contact NGDC, according to a report by Sveriges Radio on Tuesday.
The radio report also had an opinion by Bills Patrik Ohlund, CEO of the Node Pole — a major data center development located in the industrial north of Sweden — who said several factors could be driving this sudden abandonment by mining companies. He guessed the cryptocurrency bear market and a jump in Swedish electricity prices “partly caused by the past summer’s drought” created problems for a number of mining companies with operations in the country.
“In all judgments, the prospect [the operation that was supposed to be carried out in Norrbotten] does not seem so brilliant, but we will do what we can of course,” NGDC’s lawyer Fredrik Sundin told the radio station.
The Node Pole CEO remained positive about future possibilities for Sweden’s cryptocurrency mining industry. He said: “Looking five years ahead, [I] would not be surprised to see a doubling” in the number of data centers that operate in Sweden. There are about 50 such facilities in the country at predent, Ohlund estimated.
Two mining companies have abandoned mining facilities in Sweden, with over $1.5 million in unpaid bills. Here, a technician inspects the backside of bitcoin mining at Bitfarms in Saint Hyacinthe, Quebec, Canada, March 19, 2018. Photo: LARS HAGBERG/AFP/Getty Images
In October, MGT Capital Investments — a bitcoin mining firm from the United States — announced it had entered into a hosting agreement for a facility in Colorado Springs to support its bitcoin mining operations. The company also analyzed “various options to relocate its approximately 6,300 S9 antminer bitcoin miners [bitcoin mining hardware] presently housed in northern Sweden.”
Stephen Schaeffer, chief operating officer of MGT, stated in the press release that the company hoped to complete the relocation and restart mining at full capacity “before the end of December.” According to Schaeffer, the new U.S facility was capable of not only providing a cost-effective solution to the relocation needs but also facilitated the company’s growth plans.
In April, a bitcoin mining farm with 6,000 miners was stranded in Russia and the operators of the farm were arrested for not paying for eight million kilowatt-hours of electricity.
It looks like the cost of electricity has been a major setback to the crypto mining industry. In September, the Grant County Public Utility District, Washington, announced a rate hike for electricity used by cryptocurrency mining farms by as much as threefold. The reason for this hike was the heightened demand from miners, which was putting a strain on the local grid.