The Alcoa plant in Rockdale, Texas, hasn't smelted aluminum in a decade. When it ceased operations in September 2008, it laid off 660 workers, roughly 10 percent of the town's population. At the time, Reuters reported that Alcoa put the blame for the closure on "power supply issues."
It was an odd statement, given that Alcoa built the Sandnow power plant in 1951 to power its aluminum smelting operation. Luminant, the power generating company at the plant in 2008, thought so too. In a statement, it said:
"There have been no new significant power generation concerns or new pricing issues – even after Hurricane Ike. Alcoa has a history of using layoffs like this as a vehicle for managing costs and driving the company's profitability. Alcoa should acknowledge its independent decisions instead of blaming power supply issues and unspecified 'market conditions.'"
But Luminant, a subsidiary of Vistra, announced last fall it would be closing Sandnow as well, along with another central Texas coal-fired plant. Those two plants employed 650 workers. Vistra blamed low electricity prices for the closures.
Bitmain to the Rescue?
But cheap electricity is just what cryptocurrency mining operations need, and apparently Bitmain saw an opportunity. It announced today that it is turning part of the Alcoa site into a "blockchain data center and cryptocurrency mining facility," with an anticipated opening sometime in the first half of 2019. It projects that it will add 400 new full-time jobs over its first two years.
According to a press release from the Rockdale Municipal Development District (MDD), that doesn't include "an estimated 137 spin-off jobs [that] could make a major dent in Milam County's relatively high unemployment rate," nor does it include short-term construction employment. All told, both Bitmain and Rockdale MDD are touting it as a $500 million+ investment.
What's not clear is whether Bitmain will need another power supply, given Sandnow's closure. In June, Coinmint converted another former Alcoa site, this one in upstate New York, into a mining farm. That site, located on the St. Lawrence River, will run on hydroelectric power. Kara Clore, executive director of the Rockdale Municipal Development District, told ETHNews that, for now, Bitmain will be "pulling power from the Texas grid."
That may be just fine for Bitmain. Vistra spokesperson Allan Koenig said that Sandnow had been "economically challenged…for some time given low wholesale market prices due to low natural gas prices and an oversupply of generation, including subsidized renewables."
Rockdale is just another coal town trying to adjust to a new energy economy. Clore told ETHNews that the Milam County Commissioners Court is in the process of seeking a $900,000 Economic Development Administration grant earmarked for communities hit by coal plant closures. Although it's in the middle of the application process, Bitmain may use some of those funds to provide career training programs to residents.