Argo Blockchain's bitcoin mining expansion plans hit by delays

Cryptocurrency mining equipment - lots of gpu cards on mainboard gain money

Cryptocurrency mining equipment. Photo: Getty Images

London-listed bitcoin mining business Argo Blockchain (ARB.L) said production delays have impacted its purchase of mining machines, dealing a blow to expansion plans.

Argo had bought new machines “with a total of 540 petahash (PH) from a leading manufacturer”, it said, but the order was cancelled due to the equipment not being ready in time. It has placed a new order with another company.

Hash rate is a unit of measuring in hashes per second — a hash is part of a calculation that is needed to verify a bitcoin transaction.

“These mining rigs are expected to be delivered and installed in stages…later than the original order, in September and October 2021,” Argo said.

The new hardware is expected to add about 610 PH to Argo’s existing operations, bringing expected total computing power to 1.68 exahash by mid October 2021.

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As part of its mining expansion plans, Argo is working with Navier, a specialist in the design and construction of cryptocurrency mining facilities.

In May, Argo mined 166 bitcoin or bitcoin equivalent (BTC) compared to 163 in April. This brings the total amount of BTC mined year-to-date to 716 BTC and the total BTC it holds to 1,108.

Its mining revenue last month was £5.5m ($ 7.8m), down from £6.7m in April.

Argo also said that as part of its strategy to build cryptocurrency infrastructure, it has invested £146,000 in WonderFi Technologies as part of the latter’s fundraising.

WonderFi works to bring decentralised finance “to the masses through a suite of products and tools which are built on the core principles of simplicity and education.”

Argo boss Peter Wall said “access to this emerging sector needs to be democratised.”

Shares in the company rose roughly 2.6% on Thursday mid-morning.

Argo’s news comes as cryptos recover from a sell-off, following crackdowns in countries like China, and concern about the environmental impact of mining them.

After Tesla (TSLA) CEO Elon Musk said the company would no longer accept bitcoin (BTC-USD) as a form of payment due to its carbon footprint, he said he was in talks with miners including Argo about how to reduce this.

Last month, Argo and cryptocurrency tech firm DMG Blockchain Solutions (DMGI.V) signed a “crypto climate accord” aimed at promoting industry decarbonisation.

On Thursday, Argo CEO Peter Wall such “initiatives have the potential to enact systemic change within our sector and speed up the rate at which miners switch to renewable energy to power their operations.”

Argo has also bought two data centres in Quebec, Canada that are powered almost entirely by electricity generated from hydro power, “a key part of the firm’s green mining vision.”

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