Hive has closed shop in Norway over fears it would not be able to meet required development conditions, without tax relief on their electricity consumption.
Hive Blockchain Technologies (HVBTF), has officially sold its subsidiary Kolos in Norway. The sale is a result of the Norwegian government’s axed plans to give Hive a tax subsidy on electricity. The subsidy was awarded to crypto miners, in November 2018. The deal sees Hive transfer all shares of the Kolos unit to the Narvik municipality, plus, $200,000 in cash.
In an official statement Hive reportedly says the situation is “unfortunate,” but “allows the company to focus on its data centers located in Sweden and Iceland which mine ethereum (ETH) continuously on the cloud.”
Uncertainty around the project development
The Canada-based digital currency miner acquired the property for around $10 million in 2018, after Kolos announced their plan to build a 6.5 million-square feet facility. The colocation facility was to offer up to 1,000 MW of power capacity. The project was to be one of the world’s largest such facilities.
In 2018, Norway’s parliament voted to pass legislation that excluded crypto miners from relief on power consumption at an equal rate to other power-intensive industries. The change was rolled out in 2019 as part of the state budget.
A Hive spokesperson reportedly said, “As a result of this legislative change and the uncertainty around the development of this greenfield project, management concluded that it was no longer probable that the company would be able to meet the development conditions. As a result, the land development rights were impaired and were written down to $0 from $15 million, as of 31 March 2019.”
More mining equipment to be purchased
In a separate statement, executive chair of Hive, Frank Holmes, said, “We would like to express our appreciation to the local community of Narvik, who has been supportive of the challenging position that the company was facing. We are unfortunate that it has come to this but glad that the property has been retained by the local community so that the community can focus on developing this greenfield property for many uses.”
Hive claims it currently possesses crypto assets in excess of $100 million in ethereum and bitcoin. Cash assets are reported to be around $33 million.