Riot Expands Bitcoin Mining to Kentucky with $92.5M Block Mining Acquisition

Riot Platforms has acquired Kentucky-based Block Mining Inc., increasing its total bitcoin mining power capacity by 60 megawatts (MW) for $92.5 million.

The deal, finalized on Tuesday according to Riot’s filing, includes $18.5 million in cash and the issuance of 7.24 million new shares of Riot’s common stock, valuing the acquisition at $1.54 million per MW.

The Block Mining team could earn up to an additional $32.5 million if they successfully execute certain power purchase agreements in 2024 and 2025.

This acquisition marks the latest consolidation in the bitcoin mining industry following the halving event, as companies seek more power capacity. It also coincides with Riot’s intensified hostile takeover bid of Bitfarms. Additionally, Riot’s rival, CleanSpark, recently acquired GRIID in a $155 million deal last month.

Block Mining operates two sites in Kentucky with a current capacity of 60 MW and the potential to expand to 110 MW in 2024 under existing agreements. These sites are serviced by power companies including the Tennessee Valley Authority and Big Rivers Electric Corporation in the Midcontinent Independent System Operator region.

Of Block Mining’s existing capacity, 23 MW is dedicated to proprietary mining, 19 MW are vacant and ready for immediate miner deployment, and 18 MW are leased to hosting clients. According to the release, 8 MW of the hosting capacity will be made available for self-mining by Riot within 60-90 days.

In June, Riot achieved over 14 EH/s in realized proprietary hashrate from its bitcoin mining production and power credits. The company also increased its installed hashrate to 22 EH/s last month.