- Hut 8 and Validus had a partnership where both accused the other of breach of contract.
- Validus has stopped the power supply to the facility, halting all its operations.
- They both partnered to bring a dormant power plant back to life and signed a PPA agreement.
The whole Bitcoin mining industry is facing problems worldwide, adding to the list, Bitcoin mining operations were halted at the North Bay data center due to a dispute between the energy provider and the crypto company.
Hut 8 Mining had a contract with Validus Power for supplying energy to the company. Still, there seems to have been some dispute between the two causing the operations to be halted till further notice.
The news suggests that the dispute was brewing for quite some time. Hut 8 & Validus partnered to bring a dormant power plant on Highway 11 back to life. They signed a power purchase agreement (PPA) in 2021.
Hut 8 is now accusing Validus of “breach of certain obligations” with the energy contract terms and that they “failed to achieve certain key operational milestones” under the terms of the power agreement.
In the third quarter reports, the company claimed that Validus is demanding payment at higher rates than previously negotiated, despite failing to meet the contractual obligations under PPA.
Validus had not stopped the supply claiming that Hut 8 failed to make some payments, which the miner denies. They had been attempting to mediate a deal with Validus to reach a resolution.
In an online interview, Sue Ennis, vice-president of corporate development at Hut 8, speaking with Compass Mining, said that they were trying to resolve with Validus and were hoping for a positive response.
If things do not go as planned, Hut 8 hinted that they should secure alternative power suppliers through a merger and acquisition path.
Validus’ vice president of business development, Jesse Nickel, said that both parties are actively trying out measures for negotiation and are hopeful for a positive outcome. He also praised the mining company saying,
“Hut has a strong vision and deep industry expertise and they’re a great partner to Validus Power. We are optimistic and anticipating back to business as usual in due course.”
Validus has been planning to enter the crypto-mining business on its own.
There are two data centers under development in Kingston and Iroquois Falls. They will use a 120-megawatt natural gas-fired power generation facility close to the planned site of the facility. Validus has already announced plans to build a data center in Kapuskasing, which the local power plant will power.
Bitcoin mining is a very energy-intensive process; one miner alone cannot bear the cost of setting up a mining farm and a power station. Hence they go for collaborations, associations, or partnerships; such disputes are not new to any sector and can be resolved with mutual understanding.