Alcoa wants to sell its Massena East aluminum smelter in upstate New York to bitcoin mining company NYDIG, according to comments by Alcoa CEO Bill Oplinger to Bloomberg. interview.
Massena East sits on the banks of the St. Lawrence and has been in operation since 2014. The closure followed continued pressure from strong investment and global competition that reduced domestic aluminum production. The site covers approximately 1,300 acres and is equipped with heavy electricity that is built for continuous industrial use.
Alcoa wants to ditch a group of idled US smelters. The company has done it to be known ten properties that can be bought while moving to look at high-end properties and reduce exposure to high-priced properties. The Massena East property is one of the most high-profile cases in the program.
NYDIG, a bitcoin investment company affiliated with Stone Ridge, has expanded its presence in the mining industry in the last two years. The company has built relationships with mining operations through partnerships and acquisitions, including Coinmint on the Massena campus under a long-term lease plan built on the power of the facility.
The Massena East smelter draws power from the New York Power Authority hydropower system. That access to stable electricity is a very important part of the economy of digital mining. Aluminum solvents require large and stable power, and grid connections are often stable after shutdown. That infrastructure reduces the time required to convert it into a data center or mining application.
NYDIG has a technology stake in Coinmint, a bitcoin mining rig at the Massena campus. Coinmint has been handling mining clients under existing arrangements related to Alcoa’s commodity and energy contracts. The proposed project will transfer control of the smelter to NYDIG and expand its operations in the region.
Alcoa and NYDIG have negotiated terms for a transfer that includes ownership of real estate, power plants, and remaining industrial assets. The two parties intend to complete the project within the middle part of the year, pending final agreements and regulatory procedures.
Bitcoin mining is a high-performance computer
The sale follows a broader trend in North America in which retired aluminum smelters and other heavy industrial facilities are moving to digital use. These websites offer major electronic connections, shipping opportunities, and industrial facilities that are compatible with bitcoin mining and high-performance computing services.
Century Aluminum he finished a similar project related to its Hawesville, Kentucky smelter, which was sold to TeraWulf to be redeveloped into a data center and computer campus. The agreement highlighted the importance of a place with a protected capacity.
NYDIG continues to build its position in bitcoin mining through the acquisition of energy-related assets and mining operations in many US states. The company has acquired energy in North Dakota, South Dakota, Pennsylvania, and Missouri, and has added additional mining assets through various acquisitions involving energy companies.
The Alcoa-NYDIG deal, once completed, could put one of the largest US aluminum production facilities under the ownership of bitcoin mining and increase the use of industrial power that has been taking place for digital services.
