Bitcoin miner Marathon Digital (MARA) has formed a joint venture (JV) with Zero Two - backed by Abu Dhabi's sovereign wealth fund - to create the Middle East's first large-scale immersion bitcoin mining operation.
The Middle Eastern partnership comes as in the U.S., the White House is campaigning for a proposed tax advocating crypto miners in the country pay an amount equal to 30% of their energy costs.
The new project will first develop two mining sites with a combined capacity of 250 megawatts (MW) of mining power, according to a press release. The sites will be powered by excess energy in Abu Dhabi, increasing the base load and sustainability of that Middle Eastern capital's power grid, the statement continued. The necessary mining equipment and infrastructure for each site has already been ordered and construction is currently underway.
Zero Two will own 80% of the JV and Marathon 20%, with the initial capital contribution of about $406 million to be split between the two along those proportions.
Digital assets miners primarily use air cooling technology to cool their mining computers. However, in high heat and humidity environments, cooling mining machines with liquid immersion instead of air cooling offer significant advantages for miners with razor-thin profit margins.
The press release noted that the desert climate of Abu Dhabi makes air-cooled digital asset mining infeasible, and an immersion cooling pilot program launched by Marathon and Zero Two showed a sizable reduction in necessary maintenance for ASIC miners to effectively produce hash rate.
"Our collaboration with Zero Two is a pivotal moment for Marathon," said CEO Fred Thiel. "We look forward to working together to build the next-generation Bitcoin mining facilities in Abu Dhabi.”
Correction (12:20 UTC, May 11, 2023): Removes reference to "ADGM" as the name of the JV.
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