Alliance Resource Partners (ARLP), a $2.8 billion coal mining company, has announced during a recent Q1 earnings call that it has ventured into bitcoin mining by utilizing excess energy. The company, which is listed on the Nasdaq, is now holding 425 bitcoins on its balance sheet, an investment currently valued at approximately $30 million.
Cary Marshall, the Senior Vice President and CFO of Alliance Resource Partners, revealed the company's foray into bitcoin mining during the earnings call, stating, “In the second half of 2020, we started mining bitcoin as a pilot project to monetize already paid for yet underutilized electricity load at our River View mine.” The initiative has proven to be profitable, with the company reporting a net profit of $7.3 million from its bitcoin mining operations in the first quarter after deducting expenses.
The valuation of the 425 BTC at $30 million is based on the price of bitcoin toward the end of Q1 2024, which was trading at approximately $70,500. Alliance Resource Partners now ranks 23rd on the list of companies with bitcoin holdings on their balance sheets, as per data from BitcoinTreasuries.net.
Joe Craft, the President and CEO of Alliance, clarified the company's strategy on the call, emphasizing that they are not shifting their business model to focus primarily on bitcoin. “We are selling what we need to cover our expenses, so our exposure is limited,” Craft stated. He further highlighted that the company is renting out extra capacity to other bitcoin miners to capitalize on the low energy costs available at their facilities.
In comparison to other public entities with bitcoin on their balance sheets, Alliance Resource Partners' holdings are considered modest. MicroStrategy tops the list with a staggering $13.5 billion in holdings, followed by other significant players like Tesla, which owns $615 million worth of bitcoin.
Following the earnings announcement, ARLP's stock saw a 5% increase, with the company also surpassing revenue estimates. The news comes as bitcoin's value experiences an uptick, with bitcoin trading above $63,000, marking a 1.3% rise, according to CoinDesk Indices data.
As Alliance Resource Partners continues to explore the benefits of bitcoin mining using its excess power. The initiative's success to date suggests potential future growth and an additional revenue stream for the coal mining giant.
