Crypto:
30251
Bitcoin:
$66.201
% 1.06
BTC Dominance:
%54.5
% 0.21
Market Cap:
$2.38 T
% 1.77
Fear & Greed:
74 / 100
Bitcoin:
$ 66.201
BTC Dominance:
% 54.5
Market Cap:
$2.38 T

Coal Miner ARLP Strategic Expansion into Bitcoin Mining

Bitcoin Mining

At the ARLP Q1 2024 Earnings Call, Joe Craft and Cary Marshall, ARLP CEO and ARLP CFO, respectively, responded to Bitcoin mining questions.

ARLP is the largest coal miner in Eastern America. They produced 34.9 million tons of coal in 2023. The company mines cryptocurrency as a consequence of the growing popularity of digital assets in mainstream enterprises.

On the call, Marhsall said that the company had a pilot for Bitcoin mining in the second half of 2020. They made the move to monetize their ‘paid for yet unused electrical load’ at River View mine.

However, the company’s trial projects have increased over time. At the end of Q1 2024, the company had $7.3 million in property, plant, and equipment.

The CFO also stated that they were mining and holding approximately $30 million worth of bitcoin. The aggregate was 425 bitcoins. He emphasized that they should not purchase cryptocurrency. Revenues covered only part of the costs.

They also lease their excess capacity to other Bitcoin miners.

Apart from Bitcoin mining, the company pockets royalties from coal and oil gas mines all over the country.

 

ARLP Expects Strong Bitcoin Mining Performance Despite Halving Event

Every four years or so, the halving event of bitcoin occurs, which halves the total supply of bitcoin and allocates half of it to miners.

The CFO added that they mined 69 bitcoins before the halving, which took place in the first quarter of 2024, and sold 18 of them to cover certain expenses. They expected to break even after halving, given the costs since he became positive thereafter. They would accumulate more bitcoin in the following months, as stated by the CFO, because their costs of producing them were low.

READ:  Bitcoin Halving Impact: Miners Might Liquidate $5b in Post-Halving

He projected that they would mine 175–190 bitcoins in 2024, some of the profit of which would be used to cover costs. By the end of the year, he was able to capture a closing net of almost 60%.

ARLP Executives Downplay Renewables, Focus on AI and EV Growth

The two executives played down the impact of renewable energy on their coal mining operations when questioned about the matter. They talked about how their business is essential in meeting the rising need for affordable power and how renewable alternatives are falling short.

In light of the increasing competition from renewable energy sources, Joe Craft issued the following statement:

“No. I think that, in fact, I guess it’s probably given us some more optimism that our coal … we believe that our demand is going to be extended longer than what we thought at the time we entered into this type of strategy several years ago”

Joe expressed that they saw a lot of opportunities in the growing rate of data centers driven by Artificial Intelligence and industrial load led by electric vehicles and battery manufacturing in the country, areas that the US looked forward to having a first mover advantage.

The businessmen went on to say that Biden’s fossil fuel assault did little to alter the national electricity market’s underlying fundamentals.

Trading under the symbol “ARLP” on the NASDAQ Global Select Market, Alliance Resource Partners is a master limited partnership with common units.

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