Alliance Resource Partners Expands into Crypto Mining, Accumulates 425 BTC

Alliance Resource Partners (ARLP), a NASDAQ-listed coal miner, revealed during an earnings call its venture into cryptocurrency mining, boasting an impressive haul of $30 million worth of bitcoin (BTC). The company disclosed that it utilized excess power at its facilities, particularly at its River View mine, to embark on this initiative.

Cary Marshall, ARLP's Chief Financial Officer, highlighted the genesis of their crypto mining endeavor, which began as a pilot project in the latter half of 2020. Marshall emphasized the strategic utilization of already-paid-for but underutilized electricity to delve into bitcoin mining.

As of the end of the quarter, ARLP proudly reported a balance sheet containing 425 bitcoins, valued at $30 million. Marshall noted a net gain of $7.3 million after accounting for property, plant, and equipment costs, a testament to the profitability of their venture.

The positive financial results were reflected in ARLP's stock performance, witnessing a 5% surge following the earnings announcement, which also surpassed revenue expectations.

Contrary to speculative investments, Marshall clarified that ARLP is solely focused on mining bitcoin with its existing equipment, emphasizing their avoidance of direct bitcoin purchases. Moreover, the company is capitalizing on its surplus capacity by leasing it to other bitcoin miners within their data center, leveraging their low energy costs.

While ARLP's bitcoin holdings may seem modest compared to industry giants like MicroStrategy and Tesla, the company's foray into crypto mining signifies a strategic diversification strategy. MicroStrategy, for instance, boasts holdings worth $13.5 billion, whereas Tesla holds $615 million in bitcoin.

With bitcoin currently trading above $63,000, marking a 1.3% increase according to CoinDesk Indices data, ARLP's calculated entry into the crypto market appears to be timely and promising.

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