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Stronghold Digital Mining Raises $105M to Turn Waste Coal Into Bitcoin

The mining firm has a power plant in remote Kennerdell, Pa., using an alternative energy source grouped with hydropower in environmental impact.

Jun 22, 2021 at 12:00 p.m. UTC
Updated Sep 14, 2021 at 1:14 p.m. UTC

The fight for clean energy–powered cryptocurrency mining moved forward Tuesday as Stronghold Digital Mining, a digital asset miner powered by alternative energy, announced a $105 million funding round.

The raise comes from two private placements of equity securities, with investors being granted registration rights that require a future public listing, Stronghold told CoinDesk. Investors include MG Capital, various family offices and Greg Beard, a former senior partner at private equity firm Apollo Global Management. Beard is listed as Stronghold’s co-chairman and CEO.

The Pennsylvania company converts waste coal, a material left over from coal mining, into power used to mine bitcoin and other cryptocurrencies. Defined as a Tier II alternative energy source by state regulators, waste coal is equivalent to hydropower in its environmental impact. The company estimates that for each bitcoin mined, 200 tons of waste coal is eliminated.

"A negative impact on the environment has long been a criticism of Bitcoin mining, with good reason,” Beard said in a statement, adding: 

“Our ownership of the Scrubgrass Plant [in Kennerdell, Pa.] combined with the environmental benefits which accrue to the region allow us to mine bitcoin at what we believe to be some of the lowest costs in the industry while making a transformational contribution to the environment.”

The company describes itself as a “vertically integrated” miner, meaning that in addition to owning its own mining hardware, it also owns a power plant. The setup (minus the waste coal) is reminiscent of mining firm Greenidge Generation in neighboring New York state. 

The bitcoin mining industry’s carbon footprint has come under increased public scrutiny in recent months. In mid-May, Elon Musk announced his company, Tesla, would no longer accept bitcoin as a payment method citing environmental concerns. Musk later said Tesla would resume payments once the mining industry reached 50% clean energy usage. 

Earlier this month, Sen. Elizabeth Warren (D-Mass.) publicity criticized bitcoin for its negative environmental impact.

In promoting itself as an “ESG-friendly” mining firm, Stronghold seeks to at least complicate the narrative around bitcoin's environmental cost.

"Coal waste fires have been wreaking havoc in my home state of Pennsylvania for the last hundred years," Stronghold co-Chairman Bill Spence said in a statement, adding:

“Simply put, we employ 21st century crypto mining techniques to remediate the impacts of 19th and 20th century coal mining in some of the most environmentally neglected regions of the United States.”

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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