The brave new world of bitcoin took one step closer to gaining a foothold in Anaconda Tuesday night.
In a 5-0 decision, Anaconda’s county commission unanimously approved a lease agreement with BitPower LLC — the New Mexico-based company that plans to build a bitcoin “mine” along Mill Creek Highway, southeast of Anaconda.
According to the agreement, the company plans to lease from the county a nearly 40-acre site in the Mill Creek Tax Increment Financing Industrial District for $100 per year. The 40 acres reside across the street from Premier Industries’ slag processing site, about 1.3 miles southwest of Montana Highway 1 along Mill Creek Highway. There, BitPower representatives have said, the company wants to build a data center that its backers hope will turn a wealth of computing power into bitcoin gold.
In case you aren’t savvy on all things tech, bitcoin is a digital currency that has no physical form and exists only on the internet.
Bitcoins are "mined" using computers that verify transactions between bitcoin users. Computers that verify transactions are awarded bitcoin for the work they perform. The more computing power a person, entity or company has, the greater their chances are of being awarded bitcoin. One computer can "mine" for bitcoins, but large facilities housing many computers can also “mine” the currency and are called bitcoin "mines."
BitPower’s intentions to bring a bitcoin mining facility to Anaconda first came to light during a set of December schoolboard meetings.
At the time, BitPower proposed to purchase Anaconda’s vacant W.K. Dwyer School, which the company said it wanted to turn into an 8-megawatt training facility to support a bitcoin-mining operation along Mill Creek Highway.
Trustees declined to vote on a buy-sell agreement with BitPower during the board’s regular December meeting. But less than a week later, the board met for a special session and approved a second version of the agreement, which came with a purchase price of $205,000.
During both meetings, Scott Mosebach, vice president of BitPower’s parent company Burrell Group, and Rick Tabish, contractor and consultant for Premier Industries, spoke on behalf of the New Mexico-based company. When asked by The Montana Standard if he’s an investor in BitPower, Tabish declined to comment.
The company is also thought to be in the process of acquiring the MSE Technology site in Butte. (See related story on Page A1).
Meanwhile, the lease for the 40 acres of TIFID land the commission approved Tuesday is for a term for nine years, though its language says that Bit Power and the county can cancel or modify the lease should both parties agree to do so.
The lease leaves open the possibility of a new agreement coming to the table at a future date, including an agreement with an option to purchase the 40 acres. However, Anaconda Chief Executive Bill Everett said Wednesday that a new agreement would have to go through a public process and be approved by the county commission.
Tuesday Everett called the current agreement a “simple lease” as commissioners looked on.
“It’s just a simple lease, a simple short-term lease,” he said. “We will press the option to purchase at a later time.”
County Attorney Ben Krakowka made comparisons between BitPower and Premier Industries’ respective leases.
“I wrote this lease up. Our CEO told me we needed a lease, so I sat down and I spend an entire day working on it and then BitPower, their response was, ‘okay, that’s acceptable to us.’ It makes me a little bit nervous because the last one (with Premier Industries), we negotiated for about three months,” said Krakowka.
“But the lease has been written with the hope that … upon written agreement by both parties, we can both exit the lease whenever we want to and enter into another agreement, which could ultimately be a buy-sell agreement to sell the property,” Krakowka said.
Jim Davison, chairman of the Mill Creek board, told The Montana Standard Tuesday that the TIFID board has given the project a conceptual thumbs up.
Board members met during a special session Dec. 26, at which time they voted to “support the concept and proposal of the use of ADLC grounds for BitPower, LLC within the Mill Creek TIFID area,” according to a draft of the minutes.
Davison said BitPower is not the first company to express interest in the Mill Creek TIFID in recent months.
In the past year, he said, about four companies, including another with a data center project, have called or sent correspondence inquiring about the land.
Davidson said the board has been making a push to market the district, which resides in a Superfund site, recently coming out with a website that advertises the land’s proximity to potable water, the Silver Lake Waterline and the Dave Gates Generating Station, which the website says can provide “highly stable electricity and the availability of large electrical and gas services.”
These utilities, Davidson said, can be attractive to companies looking to open a data center, which need to keep their systems cool and have access to electricity. He added that fiber-optic cable also resides near the district, a relic from the days of Touch America.
As for Tabish, he told commissioners Tuesday that he’s gone through the process of setting up a large project in the TIFID before and knows what hurdles BitPower will have to jump through.
“It’ll just kind-of be a mirror of what we’re going to do on that property,” said Tabish.
“It’s going to be done first class. It’s going to be done right,” he said.