BISMARCK, ND — A crypto mining company plans to redevelop an anti-ballistic missile site in northeastern North Dakota abandoned in the 1970s into a data center that could be used for bitcoin mining and other digital currencies, Governor Doug Burgum announced on Monday.
Bitzero Blockchain Inc., which is backed by strategic investor and “Shark Tank” star Kevin O’Leary, announced last month that it plans to make North Dakota its headquarters for North American operations. The company said it plans to build 200 megawatts of data centers in the state within three years and is involved in a joint venture to become an assembly and distribution center for the technology graphene batteries.
Long considered a white elephant and a waste of taxpayers’ money, the Nekoma site was born out of a 1972 treaty between the United States and the Soviet Union.
The $6 billion Stanley R. Mickelsen Backup Complex once housed a radar system in a concrete pyramid, with 7-foot-thick steel-reinforced walls. It was deactivated in 1976 after only a few months of operation. Nekoma’s population grew to several hundred, from about 30 today, and surrounding towns benefited from an influx of highly paid missile experts and support personnel.
The Cavalier County Job Development Authority has owned the site since 2017. Spokeswoman Carol Goodman said the facility will be sold to the company for $250,000.
Burgum said waste heat captured by servers in the data center will be used to heat an on-site greenhouse, and the company is also planning an interpretation center, representing a total investment estimated by Bitzero at $500 million.
“This important piece of history will be restored and become a beacon for North Dakota innovation to the rest of the world,” Burgum said.
Bitzero signed leases to Bismarck and Fargo for administrative operations. The Nekoma site will be their primary data center in North Dakota, Burgum spokesman Mike Nowatzki said.
The second-term Republican governor hailed the Atlas Power data center to be built by Missoula, Montana-based FX Solutions Inc. as one of the largest such centers in the world, and which will help diversify the economy in the Williston area which has endured oil boom and bust cycles for decades.
Burgum, a wealthy former Microsoft executive, called data centers “an incredible industry that is forward-looking and not dependent on the price of oil.”
Data center uses include mining bitcoins and other digital currencies. Cryptocurrency mining involves supercomputers to solve complex calculations needed to ensure safe transactions in digital currency.
The process requires large amounts of energy and generates a lot of heat. Burgum said North Dakota is an ideal location for data centers because it has reliable, affordable power and a climate that lowers cooling costs.
Burgum spokesman Nowatzki said no public money has been earmarked for any of the projects, although they should be eligible for tax credits already given to agriculture, energy and other industries.