Crypto miner Marathon Digital is forming a joint venture with FS Innovation in Abu Dhabi to create and operate mining facilities.
The company said in a filing the initial project will consist of two digital asset mining sites comprising 250 MW. The new entity will be 80% owned by FSI and 20% owned by Marathon, and will cost an initial $406 million.
Marathon hasn't previously owned the facilities where it operates, instead contracting with hosting providers. The mining industry has been struggling with high energy costs and the slumping price of bitcoin from a 2021 high. Many are highly indebted and some have filed for bankruptcy.
Electricity costs about $0.081 per kilowatt hour for households in the United Arab Emirates, compared to $0.175 in the U.S., according to Globalpetrolprices.com.
Marathon declined to comment on the new venture.
Marathon closed out 2022 with $104 million cash after paying down all of its revolver borrowings.
Earlier this month, Marathon’s CEO Fred Thiel said the company made “significant progress” in increasing its hashrate while also moving to more sustainable sources.
“We remain confident in our ability to scale Marathon into one of the largest and most energy efficient bitcoin mining operations globally,” Thiel said. “We have thousands of miners ready to be energized over the coming months, which we expect to more than triple our current production capacity to approximately 23 exahashes by mid-year.”
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