Forestry firms see opportunity in cryptominers

At least two Quebec forestry companies are reviewing offers by cryptocurrency miners who want to lease excess mill space, because electricity prices in the province are among the lowest in North America.

Resolute Forest Products and Fortress Global Enterprises said they have received interest from Canadian and foreign cryptominers, although both cautioned their talks are preliminary.

“They want space and cheap power,” Chad Wasilenkoff, chief executive of British Columbiabased Fortress Global, said. U.S. miners are interested in space at the company’s Quebec dissolving pulp mill, he added.

A surge in demand for space to build data centres that “mine” digital currencies offers potential new revenue streams for Canadian forestry firms looking to find uses for space in mills no longer used for production due to declining demand for certain traditional industry products.

Montreal-based Resolute may hold a call for tenders as a way to attract well-capitalized cryptominers eager for space at the company’s mill in Gatineau, Que., and other sites.

“We are getting inquiries every week,” said Resolute spokesman Karl Blackburn. “We have space that could be used but there are still a lot of questions.”

Miners are looking at the pulp and paper industry because their facilities are already equipped to meet the needs of the energysapping cryptomining industry, said Laurent Feral-Pierssens, blockchain advisory lead at KPMG Canada.

Cryptomining consumes large quantities of energy because it uses computers to solve complex math puzzles to validate transactions in the cryptocurrency, which are written to the blockchain, or digital ledger. The first miner to solve the problem is rewarded in cryptocurrency and the transaction is added to the blockchain.

The threat of a crackdown in countries like China has driven miners to Canada, with the country’s largest electric utility, HydroQuébec, seeing its cryptocurrency sales pipeline more than triple in a month to over 100 projects, spokesman Marc-Antoine Pouliot said.