Tlou Energy starts talks on crypto mining
Mbongeni Mguni | Monday January 31, 2022 06:00
Crypto mining is the process by which new cryptocurrencies such as Bitcoin are created and introduced into the global network. The mining involves the installation of powerful and large networks of computers that compete with others globally to solve complex puzzles that create the cryptocurrency. The 'miners' are remunerated in cryptocurrencies, but the process consumes vast amounts of electricity and several countries have introduced limits or bans to protect their power grids.
This week, Tlou Energy revealed that it is considering the pros and cons of getting into crypto mining.
“During the fourth quarter, the company held discussions with an international crypto mining organisation to use Tlou's electricity to mine cryptocurrencies such as Bitcoin,” Tlou managing director, Anthony Gilby said in an update to investors. “The company is evaluating the merits of this possibility, which could lead to another avenue to generate income from Tlou’s gas. “The potential exists to generate revenue from this project while the grid connection infrastructure is being built.”
Crypto mining, which in many cases is based on fossil fuels such as coal, has been criticised for worsening the world’s climate crisis, as it can, in some cases, consume more electricity than individual countries.
The global cryptocurrency market is valued in trillions of dollars and is increasingly enjoying endorsement from major, conventional financial market players and institutions.
Meanwhile, Tlou Energy is pushing forward with the development of Coal Bed Methane (CBM), solar and gas projects at its leases where it has spent at least P500 million in various studies since 2009.
Last October, the Botswana Stock Exchange-listed company signed the country’s first CBM supply contract with the Botswana Power Corporation, which it said could yield revenues of $10 million (P110 million) annually.
The company secured additional funding of P50 million from the Botswana Public Officers Pension Fund (BPOPF) recently which will be used to finance the construction of transmission line infrastructure connecting the project site to the national grid as well as associated assets. BPOPF, which is Tlou’s single largest shareholder, has also committed to another P50 million in funding by July 1, 2022.
In his update, Gilby added that the company’s hydrogen technology partner had also completed the preliminary engineering of the state-of-the-art technology required for the hydrogen‐carbon production process.
The prototype hydrogen production unit is being built in Brisbane, Australia and is due to be transported to Botswana in the first half of this year.