Hive Blockchain Technologies (TSXV:HIVE | OTCQX:HVBTF | FSE:HBF), a block reward mining company that trades on the Toronto Stock Exchange, has sold off one of its subsidiaries. The company cited a new law that has cut off power subsidies to block reward miners as the reason for its move. Hive sold the subsidiary to a local municipality at a loss, aiming to focus on its other data centers.
In a press release, Hive confirmed it had sold its Norwegian subsidiary Kolos Norway AS to the local municipality of Narvik under a share purchase agreement. Under this agreement, Hive transferred all the shares to the municipality, along with a $200,000 payment. Hive intends to now focus on its data centers in Sweden and Iceland.
Hive cited a law that the Norwegian parliament approved in December 2018. This law outlined that block reward miners will no longer be handed relief on their electricity consumption in the same rate as other power-intensive industries. The law was effected in January 2019, denying Hive and other miners access to cheap power.
At the time, a Norwegian member of parliament remarked,
“Norway cannot continue to provide huge tax incentives for the most dirty form of cryptographic output as bitcoin. It requires a lot of energy and generates large greenhouse gas emissions globally.”
Before effecting the new law, Norway had the lowest electricity prices for industrial users among the 30 member nations of the International Energy Agency. It had also edged out Iceland as the country in the European Union with the lowest power prices for non-household users.
However, with the new law, block reward miners are feeling the pinch. For Hive, the new law has reportedly impaired the land development rights, leading it to write them down from $15 million as at March 31, 2019 to $0 currently.
Frank Holmes, the company’s executive chairman, commented,
“HIVE 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. It’s 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.”
The sale of the Norwegian subsidiary goes against recent developments by Hive, which has been expanding aggressively in recent months. Last month, it acquired a 50 megawatt data center campus in New Brunswick with access to low-cost green power. As CoinGeek reported in January, it ramped up its hardware inventory by acquiring 6,400 Canaan AvalonMiner 1246 next-generation miners. With the acquisition, the firm was able to hit its goal of 1,000 petahash per second.