Embattled Compass Mining shuts down Georgia facilities after 50% energy price hike

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Compass Mining is shutting down one of its facilities in Georgia, blaming a spike in energy costs. The company will be relocating the mining rigs to Texas.

Compass plays the role of a middleman in the block reward mining process and does no mining of its own. It allows its clients to purchase the mining rigs and has them installed and mined for the investors. This year, it has been rocked by several challenges, ranging from its tie-up with a sanctioned Russian company to the resignation of its CEO. The latest challenge emanates from an unprecedented hike in energy costs in the U.S. state of Georgia.

Speaking to one outlet, co-CEO Thomas Heller revealed that the company had been notified by the operator of its Georgia facility that they were shutting down its operations in the state. Compass doesn’t own any facilities where mining takes place and relies on independent operators, like the one in Georgia, to keep its clients’ rigs running.

The Georgia operator blamed an alleged 50% hike in the price of electricity in the state for the shutdown. He has been hosting 25MW for the company or 8,000 machines.

Compass will relocate the mining rigs to its Texas facility, revealed Heller, who took over alongside co-founder Paul Gosker as co-CEOs in June after ex-CEO Whit Gibbs stepped down. This relocation could take up to a month.

However, relocation to Texas may not be as rosy as it appears. The Texas facility has had its fair share of issues, especially on electricity supply. For a few months this year, the facility lacked electricity, and Compass had to rely on generators which were not as efficient and were much more costly. The company had even decided to relocate its Texas rigs to Georgia but had to halt the move after the electricity price hikes in Georgia.

The Georgia shutdown comes at a time when the company faces other mounting challenges in its operations. Recently, it had to sever its links to BitRiver, a Russia block reward miner that has been sanctioned by Washington. It was, however, unable to retrieve most of its clients’ mining rigs from Russia and lost over $40 million in the debacle.

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