Compass Mining breaks ground on new mining facility in Iowa

Getting your Trinity Audio player ready...

In a year when several BTC block reward miners are transitioning to AI as profitability dips, Compass Mining has expanded across the United States with its latest project—a new 30-megawatt mining facility in Iowa.

Compass announced that it had acquired a five-acre property and signed power purchase agreements in the Hawkeye State. Construction is underway for the mining facility, with 8 MW expected to be operational in January 2025, and plans to expand to 30 MW later in the year.

The expansion starkly contrasts the trend in the past two years, where miners have either folded, merged to survive, or pivoted to artificial intelligence (AI) as profitability dipped drastically. In October, listed miner Hut 8 (NASDAQ: HUT) revealed that it was offering its mining rigs to AI firms in a GPU-as-a-Service arrangement. Hut 8 joined Jihan Wu’s Bitdeer and post-bankruptcy Core Scientific (NASDAQ: CORZW), which are abandoning BTC mining for the more lucrative AI data center services.

The collapse of the BTC mining industry was inevitable, as CoinGeek has consistently pointed out. The sector’s rise was predicated on the premise that BTC’s price would perpetually rise, so it didn’t matter that the difficulty and subsequent mining costs were escalating. However, this premise has been disproven in the past two years. Once the euphoria of Donald Trump’s election wears off, the artificial pump will cease, and miners will once again start shifting to AI or shutting down.

However, Compass Mining hopes for continued demand for cloud mining services. The company has been transitioning from its former business model, in which it mainly partnered with third parties and rarely deployed its own miners.

“By increasing our self-owned capacity, we can provide our customers greater operational control. At the same time, our partnerships with reliable third-party facilities provide our customers greater deployment flexibility, reflecting both power market dynamics and geographic diversity,” said Shanon Squires, the company’s Chief Mining Officer.

As Compass expands, British miner Argo Blockchain (NASDAQ: ARBK) announced a $6.3 million loss in the third quarter. Revenue dipped 27% quarter-on-quarter to $7.5 million.

Watch: Untangling Bitcoin mining at the CoinGeek Weekly Livestream